The Indian equity market is expected to open on a cautious note on Friday following weak global cues.
Gift Nifty was trading at 19,790 level as compared to Nifty’s previous close of 19,659.90.
The domestic equity benchmark indices ended over half a percent lower on Thursday, the last day of the Nifty’s July series futures and options (F&O) contracts.
The Sensex closed 440.38 points, or 0.66%, lower at 66,266.82 while the Nifty ended at 19,659.90, down 118.40 points, or 0.60% on Thursday.
“Market is likely to consolidate given no clarity given by the US Fed on its future course of action, leading to mixed global cues. Overall strength continues in the market, with the likelihood of consolidation at higher levels,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.
Also Read: Gift Nifty, Asian markets, US GDP growth to ECB rate hike – key triggers for Indian stock market today
On the technical front, Nifty formed a lower top and bearish candle on daily charts, indicating further correction from the current levels.
The index faced resistance from the 61.82% Fibonacci retracement level (19,850) on the daily charts and started the next leg of the fall. The daily as well as hourly momentum indicator has a negative crossover which is a sell signal.
Nifty predictions
Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas said that both price and momentum indicators are suggesting that there could be some weakness in the short term.
“The daily Bollinger bands are also contracting, which points towards consolidation in the short term and thus we change our short-term stance from positive to sideways and the range of consolidation is likely to be 19,900 – 19,500,” Gedia said.
He is of the view that 19,550 – 19,500 should act as a crucial support zone, and on the upside 19,850 – 19,900 should act as an immediate hurdle zone.
Also Read: Buy or sell: Vaishali Parekh recommends three stocks to buy today — 28th July
Bank Nifty predictions
Bank Nifty failed to hold above 46,000 level and declined 383 points to end at 45,679 on Thursday. On daily charts, the index formed a bearish engulfing candlestick pattern, which is a bearish reversal pattern.
“Bank Nifty also witnessed a correction from the resistance zone 46,300 – 46,400 where the previous swing highs were placed. The daily momentum indicator has triggered a fresh negative crossover which is a sell signal,” said Gedia.
He believes that until the Bank Nifty does not manage to sustain above 46,300 – 46,400 zone, one can expect it to slip down to 45,330 – 45,300 levels where support in the form of the 20-day moving average is placed.
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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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