Sectorally, all indices ended in the red, with metals, realty, pharma, auto, private banks, and consumer durables losing 1–2%, signalling pervasive bearish sentiment. Broader markets underperformed, with the BSE Midcap and Smallcap indices falling 1.5% and 1%, respectively.
Technically, Nifty’s failure to hold above its 100-DMA and breach of the 24,400 support underscores prevailing downward momentum. The formation of a lower-top, lower-bottom structure further confirms bearish dominance. For the week, both Sensex and Nifty declined nearly 1%, marking their sixth consecutive weekly loss—the longest streak in five years—highlighting persistent market caution.
Two stock recommendations by MarketSmith India for 11 August
- Why it’s recommended: Strong import and export position, expanding global footprint, robust manufacturing infrastructure
- Key metrics: P/E: 27.60, 52-week high: ₹ 96.86, volume: ₹2,641.00 crore
- Technical analysis: Reclaimed its 21-DMA on above average volume
- Risk factors: Regulatory and compliance risk, product portfolio and R&D risk, operational and supply chain risk, and competition and pricing pressure
- Buy: ₹ 2,111
- Target price: ₹ 2,360 in two to three months
- Stop loss: ₹ 1,990
Buy: ITC Limited (current price: ₹414)
- Why it’s recommended: Diversified business portfolio, strong brand equity and distribution network
- Key metrics: P/E: 25.67; 52-week high: ₹499; volume: ₹ 406.59 crore
- Technical analysis: consumption play
- Risk factors: Commodity price volatility, competitive pressure in FMCG
- Buy at: ₹410–415
- Target price: ₹450 in two to three months
- Stop loss: ₹ 399
Nifty 50 recap
Indian equity benchmarks ended the session on a weak note, with Nifty slipping below 24,400 on August 8. At the close, Sensex declined 765.47 points (0.95%) to settle at 79,857.79, while the index fell 232.85 points (0.95%) to 24,363.30.
Market sentiment remained subdued throughout the week, primarily impacted by geopolitical developments, including the U.S. government’s imposition of an additional 25% penalty on top of existing tariffs for Indian exports.
Broader indices underperformed, with the BSE Midcap and Smallcap indices registering weekly losses in the range of 1–1.5%. Sectorally, Autos and Metals emerged as relative outperformers, while Health Care, FMCG, and Realty sectors lagged. Technically, a long bearish candle formed on the daily chart has entirely reversed the bullish bias seen on Thursday. Additionally, a long negative candle on the weekly chart marked the sixth consecutive week of declines, reinforcing the ongoing corrective phase in the market.
On the technical front, Nifty 50 breached its 100-DMA and closed below the critical 24,400 mark, signaling a weakening trend. The relative strength index (RSI) continues to decline and currently stands at 34, indicating deteriorating momentum and approaching oversold territory.
Additionally, the MACD remains in a bearish crossover, trading below both its signal line and the zero axis, further reinforcing the negative bias. This overall technical setup suggests a cautious near-term outlook, with limited signs of recovery. A meaningful reversal is unlikely unless the index decisively reclaims key resistance levels, backed by strong and sustained buying.
According to O’Neil’s methodology of market direction, market status has been downgraded to an “Uptrend Under Pressure” as Nifty breached its “50-DMA” and the “distribution day count” rose to six.
The index has decisively breached its 100-DMA and the key support zone of 24,400, signaling a shift in near-term sentiment toward weakness. The broader trend remains bearish, with the next immediate support levels seen at 24,200 and 24,000.
Until these levels are tested or held, downside pressure may persist. On the upside, any short-term pullbacks are likely to face selling pressure, making a “sell on rise” approach more appropriate. Resistance is now seen at 24,600, followed by 24,750, which could cap any recovery attempts in the near term.
How Nifty Bank Performed
On Friday, Bank Nifty opened on a positive note. However, as the session progressed, it experienced heightened volatility and eventually closed in the red. Despite the intraday weakness, the index managed to hold above its 100-DMA. On the daily chart, it formed a bearish candle, indicating continued selling pressure amid uncertain market sentiment. Over the past six weeks, Bank Nifty exhibited a weakening price structure. It recorded three consecutive bearish candles, followed by a brief bullish retracement, and has since formed two more bearish candles. This pattern reflects a clear loss of upward momentum and suggests persistent selling pressure at higher levels. The inability to sustain gains after a short-lived recovery reinforces the cautious sentiment, pointing toward a potential shift in trend on the weekly timeframe.
The momentum indicator, RSI, has bent downward and is currently positioned at 33, reflecting weakening strength in the index. The MACD has also formed a negative crossover, reinforcing the prevailing short-term bearish sentiment. According to O’Neil’s methodology of Market Direction, Bank Nifty is in an “Uptrend Under Pressure,” underscoring a cautious and fragile market environment.
Bank Nifty closed the session on a negative note but continued to hold above its 100-DMA, indicating resilience near key support levels. A potential reversal from the current zone could pave the way for an upward move toward 56,400–56,450, which coincides with the 50-DMA. Sustained buying above this zone may reinforce a positive outlook. However, a breakdown below the critical support level of 55,200 could trigger further downside and increase market volatility in the sessions ahead.
MarketSmith India is a stock research platform and advisory service focused on the Indian stock market. Trade name: William O’Neil India Pvt. Ltd. (Sebi Registered Research Analyst Registration No.: INH000015543).
Investments in securities are subject to market risks. Read all the related documents carefully before investing. Registration granted by Sebi and certification from NISM in no way guarantees performance of the intermediary or provide any assurance of returns to investors.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
