Nifty 50 Outlook: Index trades at its crucial support in volatile Indian stock market. Here’s what technicals show
- Nifty 50 outlook remains weak and the markets will consolidate in a range with stock specific action on the back of Q3 result announcements, analysts said.
The Indian stock market indices, Sensex and Nifty 50, traded lower on Friday, amid weak global market cues. Selling was intensified in the broader markets as the Nifty Midcap 100 and the Nifty Smallcap 100 index declined over 1.5% each.
Barring Nifty IT, all the sectoral indices were trading in the red, dragging Nifty 50 below the 23,500 level. Heavy losses were seen in Nifty Media, Nifty Metals, Nifty Auto, Nifty Realty, Nifty PSU Bank and other indices.
Analysts believe the Nifty 50 outlook remains weak and the markets will consolidate in a range with stock specific action on the back of Q3 result announcements.
“In the context of the looming uncertainty regarding US President-elect Donald Trump’s likely actions, the market is unlikely to rally in the near-term. There appears to be no respite to the sustained FII selling which touched ₹7,170 crore yesterday. This will continue to put pressure on the market,” said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
He believes since the results season has started, the Indian stock market will witness lots of stock-specific action in response to the results.
Nifty Technical Outlook
Nifty 50 is trading in its crucial support zone at 23,500 – 23,450.
According to Sameet Chavan, Head Research, Technical and Derivative - Angel One, this zone has served as a solid base since December and aligns with the lower boundary of a ‘Falling Channel’ pattern on the hourly chart.
“A sustained breakdown below the mentioned levels could drive Nifty 50 lower toward 23,200 – 23,000. Conversely, the immediate resistance lies at the upper end of the Falling Channel, around 23,700–23,750, followed by a stronger barrier at 23,900 – 24,000, marked by the 200 DSMA,” Chavan said.
He advises traders to closely monitor these levels on the week’s final trading day and plan their trades accordingly.
“Additionally, with the earnings season kicking off and the budget approaching, adopting a thematic strategy could present trending opportunities in the near term,” Chavan said.
Vikram Kasat, Head - Advisory, PL Capital - Prabhudas Lilladher is of the view that a decisive close of Nifty 50 below its support zone of 23,500 – 23,460 can drag the index lower to its November low of 23,263 and sub-23,000 levels in the forthcoming trading sessions.
“A 40-hour exponential moving average (HEMA) at 23,700 will be an important resistance level and a trend reversal level. The bears will have the upper hand as long as the Nifty 50 is trading below 40 HEMA,” Kasat said.
According to Akshay Chinchalkar, Head of Research at Axis Securities, Thursday’s candle has traced a so-called “tweezer bottom” which shows how important support at 23,500 is.
“Still, with the index closing below 23,583, bears clearly have the initiative now and that means resistance at 23,821 becomes a key upside hurdle. Bears in the meantime, will target the 23,238 - 23,355 zone as long as this resistance level is protected,” said Chinchalkar.
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.
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