Will Nifty 50 slip towards the July low of 23,600?

After witnessing a decent recovery from the recent lows on Wednesday, the Nifty 50 started Thursday’s session on a positive note, opening with a gap-up of nearly 83 points. The opening move helped the index fill the downside gap created in the previous session, with the benchmark touching an intraday high of 24,025.40.

However, the initial optimism faded as the index faced resistance near the 100-DMA. The bulls failed to sustain the early momentum, leading to a sharp reversal during the session. From the day’s high, the Nifty 50 declined nearly 152 points and eventually closed 41 points lower at the day’s low.

Nifty 50 forms bearish closing Marubozu after failing to hold gains

The day’s price action resulted in the formation of a bearish Closing Marubozu candlestick pattern. This pattern reflects strong selling dominance, as the index closed near the lowest point of the session with almost no lower shadow and only a small upper shadow. Although the Nifty 50 continues to remain above the previous parallel lows placed around the 23,787 zone, the overall price structure remains fragile. The inability to sustain above the previous day’s high highlights a lack of buying conviction, especially after the index faced resistance near the 100-DMA and the 61.8% retracement level of the previous upswing.

20-DMA on the Verge of Crossing Below 50-DMA

The recent recovery has provided some support, with the index forming a higher low and continuing to trade within the Bollinger Bands. However, these positive factors are not sufficient to indicate a strong reversal, as broader technical indicators remain weak.

The 20-DMA is on the verge of crossing below the 50-DMA. A confirmed bearish crossover could act as a negative signal for the short-term trend and may increase the possibility of the index moving towards a fresh lower low below 23,606.

Momentum indicators also remain under pressure. The 14-period RSI is trading below the 40 level, indicating weak momentum, while the MACD continues to remain below the zero line with the histogram suggesting increasing bearish pressure.

Resistance and Support Level for Nifty 50

For the near term, the Nifty 50 needs to reclaim the previous day’s high to improve market sentiment. A sustained move above the 24,025–24,051 zone could provide relief and trigger a short-covering rally. On the upside, the 24,207–24,239 range will remain an important resistance zone, as it comprises the 20-DMA and 50-DMA.

On the downside, Wednesday’s low of 23,786 will act as the immediate support level. A decisive breakdown below this level could lead to further weakness towards 23,606.

Can Nifty 50 Bounce Back on Friday? Key Levels to Watch

The Nifty 50’s failure to sustain higher levels after the breakdown of the earlier 400-point trading range highlights continued weakness in the short-term structure. Unless the index manages to reclaim key moving averages and sustain above crucial resistance levels, the broader trend is likely to remain cautious. The focus will now remain on whether the index can defend the 23,786 support zone or slips into another phase of decline.

Stock to Watch: Edelweiss Financial Services

Edelweiss Financial Services has witnessed a breakout from a more than two-month-long cup-like pattern, with the move being supported by robust volumes, indicating strong participation and conviction among market participants. The stock is trading above its key short-, medium-, and long-term moving averages, which suggests a positive underlying trend structure.

The 14-period RSI has moved into the bullish zone, reflecting improving momentum. The daily MACD is also trending higher and has rebounded after taking support near its nine-period average, further validating the positive bias.

As long as the stock sustains above the ₹135–135.5 zone, the outlook remains positive, with the potential to move towards the ₹145–154 range in the short to medium term. On the downside, ₹125 is likely to act as an important support level.

Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.