Indian benchmark indices are likely to begin Monday’s trading session, August 17, on a cautious note after benchmark indices Sensex and Nifty ended lower on Friday as elevated oil prices and the prolonged US-Iran impasse weighed on investor sentiment.
Technical analysts expect the indices to remain in a consolidation phase, with key support and resistance levels likely to guide the near-term trend.
Sensex, Nifty at close on Friday, August 14
Declining for the fourth consecutive session, the 50-share NSE Nifty dipped 29.85 points, or 0.12 per cent, to end at 24,366.
Vinay Rajani, Senior Technical Research Analyst at HDFC Securities, said that Nifty formed a Doji candlestick pattern on the daily chart, indicating indecision after the recent correction from the highs.
The index closed near its 20-day DEMA at 24,363 and 200-day DEMA at 24,385, making the 24,360–24,385 zone crucial for the near-term trend, he said.
Rajani further stated that immediate support remains at 24,265, followed by the psychological level of 24,000. On the upside, 24,630 and 24,750 are likely to act as key resistance zones. “A sustained close below the 200-day DEMA could weaken the technical setup, while a move above 24,630 would improve short-term sentiment,” he added.
“Nifty declined for the fourth consecutive session on Friday, losing 29 points to close at 24,366. The session remained muted, with the index moving within a narrow 100-point range throughout the day. A modest recovery of around 10 points during the Closing Auction Session (CAS) helped limit the final decline,” he said adding that the index has ended the week 0.83% lower.
“NSE cash-market turnover declined by 6% compared with the previous session, indicating continued subdued participation,” he stated.
Except for Media and Consumer Durables, all sectoral indices closed in the red. Financial Services, Pharma and Metal were the biggest underperformers.
The broader market remained relatively weak, with the Nifty Midcap 100 and Nifty Smallcap 100 declining by 0.53% and 0.69%, respectively. Market breadth on the BSE deteriorated, with the advance–decline ratio falling to 0.84, indicating increased profit booking, Rajani stated.
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, said the Nifty’s chart pattern indicates gradual weakness over the past nine sessions. He noted that the index, on the weekly chart, has formed a reasonable negative candle after the formation of doji-type pattern at the highs in the previous week, signalling a possible false upside breakout of the crucial 24,500–24,600 zone.
The consolidation movement amidst range bound movement continued in the market on Friday and Nifty closed the day lower by 29 points. The overall chart pattern indicates a gradual weakness in the market over the last 9 sessions, he said.
The consistent higher bottom formation was seen over the last couple of months. Present weakness could be in line with the new higher bottom formation, Shetti added.
He expects some more consolidation in the coming sessions. “Further weakness from here could drag Nifty down to the next lower supports around 24200-24000 levels in the near term. Immediate resistance is placed at 24500 levels,” the analyst concluded.
For the Sensex, Hitesh Tailor, Technical Research Analyst at Choice Equity Broking, expects the index to remain range-bound with a cautious bias as it trades above the 50-Day EMA but below the 200-Day EMA. “Sustaining above the 77,400–77,600 support zone can keep the recovery structure intact, while a decisive move above 78,300–78,500 would strengthen the near-term outlook,” he said, adding that for now, a buy-on-dips approach remains preferable while closely monitoring geopolitical developments and crude prices.
According to Tailor, “The BSE Sensex ended Friday’s session at 78,009.25, down by 70.71 points (-0.09%), amid a cautious market environment. Persistent geopolitical concerns in West Asia, particularly the stalled US-Iran peace talks and threats of further disruption to oil supplies, kept crude prices elevated and weighed on investor sentiment.”
“From a price-action perspective, Sensex opened at 77,903.43, moved up to an intraday high of 78,048.91 and slipped to a low of 77,684.37 before recovering and closing at 78,009.25. The index continues to trade above its 50-Day EMA at 77,382, while remaining below the 200-Day EMA around 78,602, keeping the near-term structure range-bound with a mixed bias,” Tailor added.
RSI at 53.12 remains above the midpoint, indicating moderate momentum. “Immediate support is placed at 77,400–77,600, while resistance is seen at 78,300–78,500,” he further stated.
(Disclaimer: The above article is meant for informational purposes only and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
