Nifty50 on 11 February
Nifty50 continued its losing streak for a fifth consecutive session on Tuesday, closing 310 points lower at 23,071.80 amid US trade tensions, continued FII selling, and weak Q3FY25 earnings.
The index had a muted start to the session, opening at 23,383.55, but saw continued selling pressure as the day progressed. As a result, Nifty has formed five consecutive bearish candles with a lower-high and lower-low price structure on the daily chart.
All major sectoral indices closed in the negative. Realty (-3.07%), auto (-2.33%) and FMCG (-1.94%) lost the most. The advance-decline ratio was heavily inclined toward decliners.
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From a technical perspective, the index breached its 21-day moving average (DMA) and fell below 23,000 intraday. The index is now trading below all its key moving averages, with a negative bias. The 14-day relative strength index (RSI) is currently declining, positioned at about 41. The moving average convergence divergence (MACD) indicator has shown a positive crossover but remains below its central line, signaling a cautious market outlook.
Based on O’Neil’s methodology of market direction, we downgraded the market status to an ‘uptrend under pressure’ yesterday as Nifty breached its 21-DMA and the distribution day count increased to two. Moving forward, we may change the status to ‘downtrend’ if the distribution day count increases or if Nifty fails to hold above the correction low of 22,787. On the flip side, the market status will be changed back to ‘confirmed uptrend’ if Nifty retakes 23,807.30 (its recent rally high).
Looking ahead, the 23,000–22,800 range may serve as an immediate support zone. However, falling below this range may turn the index even more negative in the coming days. On the upside, 23,350-23,400 is likely to act as a key resistance zone.
How did Nifty Bank perform?
On Tuesday, Nifty Bank opened lower and remained in negative territory throughout the day. It formed a bearish candle with a lower-high and lower-low price structure on the daily chart and retested its 21 DMA with a negative bias. It opened at 49,812.15, fluctuated between 49,906.75 and 49,177.40, and closed at 49,403.40, marking a 1.16% loss for the day.
The 14-day relative strength index (RSI) has slightly bent downward and is currently placed around 47 on the daily chart. The moving average convergence divergence (MACD) also shows a positive crossover on the daily chart and is trending near its central line.
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Based on O’Neil’s methodology of market direction, we upgraded the market status to a ‘confirmed uptrend’ last Tuesday as Nifty Bank crossed its recent rally high, placed at 49,650.60. On the flip side, we may downgrade the market status to ‘uptrend under pressure’ if the distribution day count increases and the index breaches its key support level.
Looking ahead, the 21-DMA, currently placed around 49,250, is a key level to watch as immediate support. Decisive breaches below this level may turn the index even more negative toward 48,500. On the upside, immediate support is placed around 50,000.
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Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
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