The news of the US Federal Reserve cutting interest rates by 25 basis points has caused a stir in the global markets. Despite the positive signals received from this, the Indian stock market indices Sensex and Nifty 50 are expected to open flat on Friday.
The trend of GIFT Nifty also reflects this direction, which indicates a stable start of the Indian benchmark index. GIFT Nifty is trading at around 24,290 level, which is about 10 points lower than the previous day’s Nifty futures.
The domestic stock market closed with a huge decline on Thursday, with the Sensex falling 836.34 points or 1.04% to close at 79,541.79 and the Nifty falling 284.70 points or 1.16% to close at 24,199.35. This decline after the gains of the last two days created a long negative candle on the chart of Nifty 50, indicating market volatility.
HDFC Securities Senior Technical Analyst Nagaraj Shetti said, “Nifty’s resistance level of 24,500 is intact and it seems difficult to sustain above it. Technical indications suggest that a slight decline or consolidation may remain till the level of 23,800.” According to Shetti, the market is in a phase of short-term volatility and it will continue till the Nifty is able to cross the level of 24,500.
During this time, the level of 23,800 can provide strong support to the Nifty. If we look at the options data, the maximum call open interest (OI) is seen at the strike price of 24,500 and 25,000, while the maximum put open interest is at the strike price of 23,000 and 24,000. According to Chandan Tapadia, this data suggests a large trading range between 23,500 to 24,500. At present, Nifty is likely to remain between 23,800 to 24,200 levels.
At the same time, Sharekhan’s technical research analyst Jatin Gedia says that “Nifty 50 has faced pressure from the upper barrier, but daily indicators are still giving buying signals. In the short term, the outlook for Nifty looks positive towards the targets of 25,350, while on the downside, the level of 24,000 will remain an important support.”
Aditya Agarwal, lead analyst at Sanctum Wealth, believes that profit booking has been seen in the market due to Nifty 50’s failure to sustain above the 24,500 level. Along with this, Nifty is likely to consolidate between 24,000 to 24,500. During this time, if Nifty falls to 24,120-24,040 then it can be seen as an opportunity to initiate long positions.
Dr. Praveen Dwarkanath, Vice President, Hedged.in said that Nifty 50 closing below 10 DMA indicates a downtrend. If it breaks the support level of 23,800, then there is a possibility of a decline to 23,000.
Bank Nifty Scenario
Bank Nifty also closed 400.90 points or 0.77% lower at 51,916.50 on Thursday, with a red candle forming indicating a downtrend. Jatin Gedia pointed out that Bank Nifty is facing rejection at 52,500, but at the moment it is getting support at 51,750-51,650 levels. In the short term, it may show a positive trend while remaining sideways.
According to Dr. Praveen Dwarkanath, Bank Nifty has got support at 30 DMA, but the resistance of 52,500 still remains key. He warned that if Bank Nifty goes below 51,000 level, there could be a possibility of a move towards 49,500.
