The broader market lagged behind the benchmarks, with the NSE Midcap and Smallcap indices declining 0.25% each. The Nifty opened on a muted note at 23,050.80 and dipped toward its previous swing low of 22,800 before staging a sharp recovery. Despite volatility in the second half, the index managed to hold above the psychological 23,000 mark. The session resulted in a doji candle with a long lower wick, signaling strong buying interest at lower levels.
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Among sectors, only BFSI and Metal closed in the green, while all other major indices ended in the red. Market breadth remained weak, with the advance-decline ratio at 0.67, reflecting a strong tilt toward decliners.
From a technical standpoint, after breaching its 21-day moving average (DMA), Nifty found support near its previous swing low at 22,786. The index is currently trading below all key moving averages with a negative bias. The 14-day Relative Strength Index (RSI) is hovering around 41, trending sideways, while the Moving Average Convergence Divergence (MACD) has formed a positive crossover but remains below its central line, indicating a cautious market sentiment.
Following O’Neil’s methodology of market direction, we downgraded the market status to ‘Uptrend Under Pressure’ after Nifty breached its 21-DMA and the distribution day count increased to two. A further downgrade to ‘Downtrend’ is possible if the distribution day count rises or if Nifty fails to hold above the correction low of 22,787. Conversely, the market status would be upgraded to a ‘Confirmed Uptrend’ if Nifty reclaims 23,807.30, its recent rally high.
In the near term, immediate support lies around 22,800. A decisive break below this level could accelerate downside pressure. However, sustained trading above 23,000 may trigger a bounce toward 23,350–23,400 in the coming sessions.
How Nifty Bank performed
Nifty Bank opened flat and remained volatile in the first hour of Wednesday’s session. However, the index recovered from lower levels, erased its intraday losses, and managed to close in positive territory. While it retested its 21-DMA, it failed to sustain above it. On the daily chart, the index formed a bullish candlestick pattern with a long wick, signaling buying interest at lower levels.
The index opened at 49,402.25, fluctuated between 49,702.35 and 48,734.35, and closed at 49,479.45, marking a 0.15% gain for the day.
From a technical perspective, the 14-day RSI is trending sideways, currently positioned around 47 on the daily chart. Meanwhile, the MACD has formed a positive crossover and is trading near its central line.
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As per O’Neil’s methodology of market direction, we upgraded the market status to a Confirmed Uptrend last Tuesday after Bank Nifty crossed 49,650.60 (its recent rally high). However, a downgrade to ‘Uptrend Under Pressure’ may be warranted if the distribution day count increases or if the index breaches a key support level.
Key levels to watch
The 21-DMA (49,287) remains a crucial hurdle—sustaining above this level could drive the index toward 50,000–50,500 in the coming days if buying interest picks up.
Immediate support is placed at 48,500–48,000; a breakdown below this range may accelerate selling pressure.
Two stocks to buy, recommended by MarketSmith India:
● Ashok Leyland Ltd: Current market price ₹ 219.35 | Buy range ₹ 212–222 | Profit goal ₹ 262 | Stop loss ₹ 198 | Timeframe 2–4 Weeks
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● Godrej Agrovet Ltd: Current market price ₹ 754.45 | Buy range ₹ 735–755 | Profit goal ₹ 895 | Stop loss ₹ 680 | Timeframe 1–2 Months
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.
