On Wednesday, the Nifty 50 index opened on a positive note but failed to sustain gains at higher levels and eventually settled lower at 24,207.75. The decline remained modest during the session, while the CAS adjustment at the close led to an additional downtick of nearly 68 points in the index.
While the frontline index ended in negative territory, the broader market remained relatively resilient. The Nifty Smallcap 100 index outperformed and touched a fresh all-time high. The session also witnessed sectoral rotation, with buying interest shifting towards metals, banking and financial services, while IT and FMCG stocks remained under pressure.
Bearish Candle Formation Signals Selling at Higher Levels
The Nifty erased the gains made in the previous session and formed a sizeable bearish candle on the daily chart. The index closed near the day’s low.
Following the CAS-led decline, the Nifty slipped below its 8-EMA. However, the index continued to hold the important 50-DMA support level.
Volatility Remains Subdued Despite Market Weakness
The volatility index continued to remain at lower levels, with India VIX declining 4.6% to 10.5, marking a multi-month low. Implied Volatility also stayed near its lowest levels.
Nifty Stays Within 24,000-24,400 Range
The Nifty continues to trade within a narrow range of 24,000-24,400. Going forward, a sustained move above the 24,400 level would indicate strength and could lead the index towards the 24,550-24,650 zone in the near term.
On the downside, the 24,000 mark remains an important support zone. A decisive breach below this level could increase selling pressure and impact the broader market sentiment.
Important Levels to Track for Thursday
For Thursday’s session, 24,115 is likely to act as the immediate support level, which was the intraday low recorded on Wednesday. A break below this level could drag the index towards the next support zone of 24,000-24,040.
On the upside, the Nifty needs to reclaim and sustain above 24,400 to move out of the current consolidation phase. Until then, the market is likely to remain range-bound.
Stock to Watch: Cochin Shipyard
Cochin Shipyard is showing signs of a potential breakout from a three-month-long rectangle pattern. The stock has witnessed a gradual rise in volumes in recent sessions and is currently trading above its key moving averages, including the 20, 50, 100 and 200-DMA, indicating strength in the underlying trend. The 14-period RSI has entered bullish territory, while the daily MACD has given a positive crossover, further supporting the improving technical structure.
A sustained move above the ₹1,555–1,558 zone could strengthen the bullish setup and open the possibility of a move towards ₹1,640, followed by ₹1,680 in the medium term. Traders can maintain a stop loss at ₹1,502 to manage risk.
Disclaimer: This story is for educational and informational purposes only. The views and recommendations above are those of Dalal Street Investment Journal, not Mint. We advise investors to check with certified financial experts before making any investment decisions.
