The Indian stock market poised for a muted opening on Wednesday as global market cues remain mixed. Following a volatile Monday session, Tuesday saw a significant decline, for the Nifty and overall market. This came in with crucial support levels being breached and minor intraday rebounds met with selling pressure.
Previous Session
On Tuesday, the Sensex plunged 930.55 points, or 1.15%, closing at 80,220.72. While the Nifty 50 fell 309.00 points, or 1.25%, to settle at 24,472.10. This strong selloff marked a decisive downside breakout attempt from the 24,600-24,500 levels. It was indicated by a long bear candle on the daily chart.
Trends on the Gift Nifty suggest a warm start, with the index trading around the 24,550 level. Reflecting a premium of nearly 10 points from the previous Nifty futures close. Investors remain cautious as market sentiment adjusts to recent developments.
Experts Observations
According to an expert, after a series of higher tops and bottoms on the Nifty 50 daily chart over the past few months, the index is now weakening. It has formed a new lower top around the 25,230 level, indicating a negative trend and an ongoing downward correction.
He highlighted, a crucial support level around 24,500- comprised of an ascending trend line. A 23.6% retracement, and the weekly 20-period EMA- is nearing a potential downside breakout. He also emphasized that the short-term trend remains negative, and a decisive move below the 24,500 to 25,450 range could lead to a new downside target of 24,000. He also suggested that any rise toward the immediate resistance at 24,700 might present a selling opportunity.
Nifty 50 Experiences Significant Decline, Closing Below Key Support Level
On October 22, the Nifty 50 experienced a sharp decline, closing down by 309 points and settling below the critical 24,500 level.
An expert pointed out that the index has slipped decisively below its 20-week moving average of 24,718, indicating a clear sign of weakness in the market.
Bank Nifty Declines Sharply, Forming Long Bearish Candle
The Bank Nifty index fell significantly on Tuesday, plunging 705.55 points, or 1.36%, to close at 51,257.15, while forming a long bearish candle on the daily chart. The index opened lower and failed to recover throughout the trading session, signaling underlying weakness.
Experts have observed that Bank Nifty is expected to find immediate support around the 51,000 and 50,800 levels, a potential pullback may occur. He also highlighted that the 52,000 to 52,250 range will act as a strong supply zone. This is with profit booking anticipated at these levels.
Advisory: Monitor Global Markets Amid Uncertainty
Given the recent volatility in the markets, it’s advisable for traders to keep a close watch on global market trends. With the Indian market experiencing a downturn, external factors such as global tensions could further impact market conditions. Traders are encouraged to stay informed and cautious before entering the unpredictable trading environment.
