The Indian stock market benchmark indices, Sensex and Nifty 50, are likely to open flat on Wednesday, tracking weak cues from global markets. Optimism over the India-US trade deal is expected to support the sentiment in the domestic equities.
The trends on Gift Nifty also indicate a flat start for the Indian benchmark index. The Gift Nifty was trading around 25,819 level, a premium of nearly 2 points from the Nifty futures’ previous close.
On Tuesday, the Indian stock market posted a strong rally on the announcement of the India-US trade deal, with the benchmark Nifty 50 ending above 25,700 level.
The Sensex surged 2,072.67 points, or 2.54%, to close at 83,739.13, while the Nifty 50 settled 639.15 points, or 2.55%, higher at 25,727.55.
Here’s what to expect from Sensex, Nifty 50, and Bank Nifty today:
Sensex Prediction
Sensex opened with a gap of over 3,500 points, but due to temporary overbought conditions, it witnessed some profit booking at higher levels.
“We are of the view that the short-term market outlook remains positive, but a strategy of buying on dips and selling on rallies would be ideal for traders. On the downside, retracement support for Sensex is placed at 83,000 and 82,500, while 84,300 and 84,500 would act as immediate resistance levels for the bulls. However, below 82,500, the uptrend could become vulnerable,” said Shrikant Chouhan, Head Equity Research, Kotak Securities.
Nifty OI Data
Derivatives data shows heavy put writing at the 25,500 strike and strong call writing at the 26,000 strike, indicating the formation of a near-term trading range.
“Traders are advised to adopt a buy-on-dips strategy near key support levels and wait for a decisive breakout above resistance before initiating fresh directional positions,” said Hitesh Tailor, Research Analyst – Research at Choice Equity Broking.
Nifty 50 Prediction
Nifty 50 formed a large red candle on the daily chart; however, the index managed to close above the 38.2% Fibonacci retracement level, placed around 25,500.
“A long red candle was formed on the daily chart after opening higher. Nifty 50 closed higher by leaving an unfilled gap within 25,108 – 25,641 levels (533 points of unfilled gap). This is a significant breakout of bulls after a few weeks of sharp downward correction. As per gap theory, if said opening gap remains unfilled for the next 3-4 sessions, then that could be considered as a bullish breakaway gap, which is normally formed in the middle of a sustained uptrend,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.
According to him, the underlying trend of the market remains positive, and as long as Nifty 50 stays above 25,600, there is a higher probability of it heading higher towards the hurdle of 26,000 and next 26,300 in the near term. Immediate support is placed at 25,600.
Nilesh Jain, Head – Technical and Derivatives Research Analyst (Equity Research), Centrum Broking Ltd. noted that Nifty 50 reclaimed its long-term 200-DMA at 25,250 and the 100-DMA at 25,630. The index also negated the bearish setup and managed to sustain above the 25,600 mark.
“On the momentum front, MACD has generated a fresh buy crossover, while RSI has rebounded from the oversold zone and moved above 50, signaling improving strength. Meanwhile, India VIX cooled off sharply by 6% to close near 13, any further decline in volatility would provide additional comfort to the bulls. Overall, the structure for the Nifty 50 appears positive for 26,100 levels, and a buy-on-dips approach remains advisable as long as Nifty 50 holds above 25,250,” said Jain.
Bank Nifty Prediction
Bank Nifty index ended 1,422.30 points, or 2.43%, higher at 60,041.30 on Tuesday, forming a bearish candle on the daily chart.
“The 59,600 – 59,500 zone will act as a key support area for the Bank Nifty index. On the upside, the region between 60,300 – 60,400 remains the immediate resistance, and a breakout above this band may revive upward momentum,” said Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities.
Om Mehra, Technical Research Analyst, SAMCO Securities said that the daily chart shows a large candle with a long upper shadow, highlighting selling pressure emerging near record levels after the sharp opening move.
“Bank Nifty index managed to close above all the key moving averages. The RSI is placed near 56, reflecting a recovery from recent weakness. The DMI setup shows the positive directional line above the negative line, accompanied by a rise in trend strength. For Nifty Bank, 59,600 remains the immediate support level on the downside, followed by 59,400. A move below this zone could bring short-term pressure back into focus,” said Mehra.
The resistance is placed near 60,437, which marks the earlier 52-week high, followed by 60,500. Currently, the Nifty Bank index is positioned near record levels, after a sharp gap-up move, but resistance levels are likely to guide the next directional move, he added.
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 making any investment decisions.
