The Indian equity market is undergoing a healthy consolidation. The benchmark indices are likely to open lower on Friday amid mixed global cues.
Trends on Gift Nifty also suggest a weak opening for the frontline indices as the Gift Nifty futures were trading 19,558 as compared to Nifty futures’ previous close of 19,599.
The benchmark Nifty50 fell 89 points on August 10 and closed the volatile session at 19,543.
The index is facing strong resistance at around 19,650 level. Nifty traded in the range of 19,467 – 19,645 in the previous trading session and was unable to witness follow-through buying. The level of 19,500 has been acting as a strong support for the Nifty.
Analysts believe a break on either side of the 19,440 – 19,645 band could determine the near future trend of the Nifty.
Also Read: Six things that changed for market overnight: Gift Nifty, US inflation to global market cues for Sensex today
Nifty
Nifty formed a small negative candle on the daily chart with minor upper and lower shadow.
“Technically, this pattern indicates sideways movement in the market with weak bias at the crucial resistance of 19,650 levels. The repeated testing of the hurdle without showing any sharp weakness could eventually result in an upside breakout of the said resistance,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
Negative chart patterns like lower tops and bottoms are intact as per daily chart. Though, Nifty seems to have formed a new lower top at 19,645 levels on Wednesday, there is no indication of any sharp weakness from the lower highs, he added.
“Hence, a decisive move above 19,650-19,700 levels is expected to bring a sharp upmove for the market ahead and further weakness from here could find support around 19,450-19,400 levels for the short term,” Shetti said.
Also Read: Buy or sell: Vaishali Parekh recommends three stocks to buy today — 11th August
Bank Nifty
The Bank Nifty index witnessed significant selling pressure after the announcement of the Reserve bank of India (RBI) policy on August 10. The index has been facing substantial resistance at the 45,000 mark.
“Breaking through this resistance level could be demanding due to the prevailing selling pressure. Support can be identified around the 44,400 level. A drop below this support could further empower the bears and potentially lead to additional downward movement. To regain control, bullish momentum would need to overcome the hurdle at 45,150,” said Kunal Shah, Senior Technical & Derivative analyst at LKP Securities.
Surpassing this level, Shah believes, could provide the bulls with an upper hand and potentially steer the index towards a more positive trajectory.
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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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