Nifty Near Breakdown? SEBI RAs See Bearish Bias If Key Supports Breached

Indian markets remained rangebound on Thursday, with the Nifty index holding 25,100 level on expiry day. Global weakness, lack of buying interest, and weakness in financials, IT, and heavyweights weighed on the investor sentiment. Analysts now warn of fresh correction if the index fails to clear the crucial support levels decisively.

SEBI-registered analyst Pradeep Carpenter noted that price action on Thursday indicated indecisiveness and low momentum in the market. 

If it breaks below 25,131, we may see a dip towards 25,062 or even 25,013. Any bounce above the pivot level of 25,150 will only bring temporary relief. Going ahead, the outlook remains cautious with a bearish bias if selling continues. He identified crucial support around 25,062, which could be tested if weakness persists on the Nifty index.

On the Nifty Bank, the index remained in a tight range, closing just near 56,892. He pegged it as a crucial level to watch, and sustained trade below this could drag the Nifty Bank to 56,651 or even 56,474. For any move, it needs to break convincingly above 56,956.67. The outlook remained weak to sideways, with caution near supports. 

Overall, he expects a sideways to negative tone unless key resistance levels are breached. The market is consolidating with a bearish undertone ahead of the weekend; hence, support levels will be critical for Friday’s trade.

Dhruv Tuli highlighted that the Nifty broke below the rising trendline and intraday range on Thursday, confirming a short-term bearish structure. For Friday, the ‘sell on rise’ bias stays valid with resistance at 25,150, and support at 25,030.

He believes that the index may retest 25,030 before any fresh move. The Relative Strength Index (RSI) stands near 30, indicating weak momentum, so avoid aggressive longs, he added.

Bharat Sharma of Stockace Financial Services noted that the Nifty index faced resistance at the 20-day Exponential Moving Average (EMA) of 25,240-25,250 for the third consecutive day. This inability to break above this level is indicative of weakness in the markets. Nifty formed a Doji candle on Wednesday, followed by negative price action on Thursday, which reinforced the bearish sentiment. 

Such a price movement is indicative of a new round of correction, especially if the Nifty index fails to sustain above 25,000, he added. Thursday’s candle formation signals potential for further downside. 

If the Nifty breaks below 25,000, it could find support at the 50-day EMA of 24,900, followed by the next important support at 24,800. Although Nifty closed above 25,100 on Thursday (a minor positive signal), the presence of a red candle of over 100 points near the 20-day EMA resistance shows weakness. 

For Friday, Sharma identified immediate support at 25,100, which, if breached, can lead the index to the support levels of 25,060 and 25,000, and further down to 24,900-24,800. On the upside, immediate resistance is seen at 25,140-25,150, followed by the next levels at 25,200-25,230 and higher.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Share

·

Add us on