Nifty 50, Sensex today: What to expect from Indian stock market in trade on August 6 after a crash

Indian stock market benchmark indices, Sensex and Nifty 50, are likely to open higher on Tuesday after the markets crashed in the previous session.

The trends on Gift Nifty also indicate a gap-up start for the Indian benchmark index. The Gift Nifty was trading around 24,310 level, a premium of nearly 215 points from the Nifty futures’ previous close.

On Monday, the domestic equity indices plunged nearly 3% each following the slump in global markets.

The Sensex crashed 2,222.55 points, or 2.74%, to close at 78,759.40, while Nifty 50 plunged 662.10 points, or 2.68%, to end at 24,055.60.

Nifty 50 formed a long bear candle on the daily chart with a sharp gap down opening.

“We observe back-to-back two opening downside gaps which remain open. This is a negative indication and indicates that the recent all time high of 25,078 of 1 August could be considered as an important top reversal pattern,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

He believes the short-term trend of Nifty 50 is sharply down and the overall chart pattern from smaller to larger timeframe is looking weak. The next downside to be watched is around 23,625 (38.2% Fibonacci retracement taken from 4 June bottom to 1 August top). Immediate resistance is placed at 24,250 levels.

Here’s what to expect from Nifty 50 and Bank Nifty today:

Nifty 50 Prediction

Nifty 50 index witnessed bloodbath on August 5 and tanked by 662 points to close near 24,000 level.

“Nifty slipped back into the rising channel on the daily time frame due to heavy selling during the day. On the lower end, Nifty found initial support at the 50-EMA (Exponential Moving Average) before closing slightly higher. The RSI is in a bearish crossover and falling. Sentiment is likely to remain weak in the short term and may weaken further below 23,900,” said Rupak De, Senior Technical Analyst, LKP Securities.

According to him, support is placed at 23,900 - 23,700 levels, and on the higher end, resistance is seen at 24,200 - 24,500.

Bank Nifty Prediction

Bank Nifty index plunged 1,258.05 points, or 2.45%, to close at 50,092.10 on Monday, forming a bearish candlestick pattern.

“The Bank Nifty index breached its swing low support of 50,440 and corrected sharply along with the benchmark index. The Bank index too rebounded marginally from the 50% retracement support level which was placed around 49,720. This will be seen as a crucial level in the coming session as if this gets breached, then the correction could extend towards 48,860 in the short term,” said Ruchit Jain, Lead Research, 5paisa.com.

We continue with our advice to avoid bottom fishing the banking space for now as it also was an underperforming sector in the recent upmove in markets, 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.