The Sensex and Nifty 50 indexes of the Indian stock market are expected to continue their decline from the previous session’s steep decline, following conflicting signals from their international counterparts.
The Indian benchmark index is off to a bad start, according to Gift Nifty’s statistics. Around 22,048 was where the Gift Nifty was trading, which is about 60 points below the previous closing of the Nifty futures.
The benchmark Nifty 50 closed below 22,000 on Wednesday as a result of widespread selling across all sectors, which caused the local equities indices to plunge sharply by more than a percent.
The broad-based Nifty 50 closed 338.00 points, or 1.51%, lower at 21,997.70, while the Sensex fell 906.07 points, or 1.23%, to close at 72,761.89.
On the daily chart, the Nifty 50 produced a long bear candle that fell below both the uptrend line and the 10/20 day EMA (Exponential Moving Average), which serves as immediate support.
The way the Nifty fell off of its most recent near-all-time high of 22,526 levels suggests that an important top reversal pattern may be forming at the all-time high. On the daily chart, the bullish pattern of higher tops and bottoms persisted, and the current weakening might be consistent with the construction of a new higher bottom. However, a strong decline below 21,860 levels—the last higher low on February 29—could undermine this bullish setup and ultimately result in the formation of a bearish pattern resembling lower tops and bottoms, according to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.
According to Shetti, the Nifty 50’s short-term trend appears to have turned negative. In the short run, it is anticipated that follow-through weakness from here will push the Nifty 50 down to levels of 21,500.
Good OI Information
Regarding the Open Interest (OI) statistics, the maximum OI was noted at 22,000 strike prices on the call side and at 21,800 strike prices on the put side.
On the daily chart, the Nifty broke out of a rising channel, indicating the end of the previous uptrend and the possible start of a slump. To emphasize the growing weakness, the index has also dropped below the recent consolidation phase on a daily basis. Rupak De, Senior Technical Analyst at LKP Securities, stated that the Relative Strength Index (RSI) with a period of 14 is displaying a bearish crossover and has fallen below the 50 threshold.
He thinks the index would be vulnerable to selling pressure in the near run, with resistance being seen at 22,250. Support levels are located at 21,800 and 21,700 on the downside.
Forecast for the Bank Nifty