The Indian stock market is anticipated to experience a downward trend in its benchmark indices, Sensex and Nifty 50, as they prepare to open lower on Monday. This shift follows a mix of signals from global markets, with the Gift Nifty indicating a negative start as it trades around the 22,605 mark, about 45 points lower than the previous close of Nifty futures. Despite a flat performance on Friday, where Nifty 50 managed to remain above 22,550, the outlook appears cautious.

Sensex Outlook

Sensex has established a reversal pattern on both daily and weekly charts, suggesting a possible continuation of the upward trend. According to Amol Athawale, Vice President of Technical Research at Kotak Securities, "The presence of a long bullish candle on the weekly charts, along with an uptrend continuation formation on intraday charts, supports the possibility of an upward move." He anticipates that 74,000 and 73,700 will serve as critical support levels for traders. Should the Sensex maintain trading above these thresholds, it could rebound towards the 20-day SMA near 75,200. However, if it dips below 73,700, market sentiment may shift negatively, prompting traders to reconsider their long positions.

Nifty 50 Analysis

In the derivatives market, there’s a cautious optimism surrounding the Nifty 50. Dhupesh Dhameja, a derivatives analyst at SAMCO Securities, notes that the put writers show more confidence than call writers, signaling an overall positive sentiment among market participants. He explains, “Strong open interest at the 22,800-call strike solidifies this level as a key resistance area, while robust put writing at 22,300 establishes a solid support level.” The Put-Call Ratio (PCR) has decreased slightly from 1.18 to 1.09, yet it still reflects an improving market outlook.

Technical Insights for Nifty 50

The Nifty 50 has been in a consolidation phase, closing slightly higher by 7 points. Over the past week, it has shown a remarkable increase of 1.93%, indicating a bullish undertone. Nagaraj Shetti, a Senior Technical Research Analyst at HDFC Securities, states, “The formation of a small positive candle along with a reasonable upper shadow suggests ongoing consolidation at resistance levels.” He believes that if Nifty 50 breaks above 22,750 to 22,800, bullish momentum may re-emerge. On the other hand, any dips may find support around the 22,250 level.

Bank Nifty Forecast

The Bank Nifty closed at 48,497.50, reflecting a slight decline of 0.27% but managed a weekly gain of 0.32%, indicating consolidation in a broader range of 47,840 to 48,840. Puneet Singhania, Director at Master Trust Group, highlights that Bank Nifty has found support at 47,800, aligning with the 100-week EMA. “Immediate resistance is at 48,900, and a breakout above this could push the index towards 49,500,” he adds. The current RSI stands at 42, suggesting weak momentum, and a drop below 47,800 could lead to further declines towards 47,200.

Key Takeaways

• Sensex and Nifty 50 likely to open lower on Monday.
• Critical support levels for Sensex at 74,000 and 73,700.
• Nifty 50 shows bullish signs, with possible resistance at 22,720.
• Bank Nifty faces immediate resistance at 48,900.

Investors should keep a close watch on these pivotal levels as they navigate through the current market conditions. For more insights on stock market trends and analysis, check out our resources on market strategies and investment tips.