On the daily chart, Nifty formed a bearish candle with a lower-high and lower-low price structure. Sector-wise, IT was the only major index to end in the green, while others closed lower. The weekly chart also reflected weakness, with the index forming a bearish candle featuring a lower-high and lower-low structure. Importantly, it closed below the 50-week moving average (WMA).
The market breadth was notably weak, with the advance-decline ratio heavily skewed toward decliners, settling at approximately 1:5.
From a technical perspective, the Nifty 50 failed to sustain above its 50-week moving average and breached a critical support level today—an upward-sloping trendline connecting the lows of 21 November and 31 December 2024. The 14-day Relative Strength Index (RSI) is trending downward, currently positioned around 38 on the daily chart, while the Moving Average Convergence/Divergence (MACD) indicator continues to signal negativity.
According to O’Neil’s market direction methodology, the Nifty gained over 1.7% with higher volumes last Thursday, prompting an upgrade of the market condition to a Confirmed Uptrend. However, if the distribution day count rises and the index breaches key support levels, the status could be downgraded to Uptrend Under Pressure.
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Currently, the Nifty is trading marginally above its key support level of 23,400, having already breached its 200-WMA. A decisive fall below 23,400 could open the door to further downside, potentially pulling the index toward 23,000. On the upside, resistance is likely around the 23,800–24,000 range.
Nifty Bank performance
On Friday, Nifty Bank opened on a negative note and remained in the red throughout the session. The index formed another bearish candle on the daily chart, characterized by a lower-high and lower-low price structure, reflecting a negative bias. On the weekly chart, it formed a significant bearish candle, breaching its 50-week moving average (WMA) and losing approximately 2,254.65 points (-4.6%) over the week.
The index opened at 49,426.50, traded within a range of 49,483.15–48,631.20, and closed at 48,734.15.
From a momentum perspective, the RSI has rebounded slightly from oversold levels and is currently at 29. However, the MACD indicator remains in negative territory on the daily chart.
According to O’Neil’s methodology of market direction, the market status has shifted to a Downtrend. It breached its 200-DMA and is currently trending below all its key moving averages with a negative bias. Looking ahead, we will shift the market to a Rally Attempt if Nifty establishes a bottom and stays above its recent low for three straight sessions.
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At present, the index has breached its 200-DMA, below the key support zone of 49,500 and is trending below it with a negative bias. The next immediate support is placed near 48,500–48,000. After breaching this support, the index might open a fresh downside window. Moving forward, the 200-DMA is a key level to watch on the upside, placed around 50,750, which may act as a critical resistance level.
Stocks to buy, recommended by MarketSmith India:
● Tata Consultancy Services Ltd: Current market price ₹ 4,265.65 | Buy range ₹ 4,200–4,300 | Profit goal ₹ 4,700 | Stop loss ₹ 3,990 | Timeframe 1–2 Months
Also read | Top 5 high return stocks to watch out for in 2025
● Bharti Airtel Ltd: Current market price ₹ 1,615.90 | Buy range ₹1,575–1,625 | Profit goal ₹ 1,850 | Stop loss ₹ 1,510 | Timeframe 3–4 Months
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.
