Following a mild correction on Monday, the Indian stock market continued its downward trajectory on Tuesday, February 18. The Nifty 50 rebounded by 137 points during the day but ultimately closed at 22,945, registering a slight drop of 0.06% from the previous close. Meanwhile, the Sensex recovered 491 points from its intraday low and ended with a modest gain of 0.04%, settling at 75,967 points.
The market sentiment, on Tuesday, remained subdued due to ongoing concerns on weak corporate earnings, continuous foreign outflows, and global trade uncertainties. Meanwhile, small-cap and mid-cap stocks declined amid valuation concerns.
“The Nifty index opened flat, witnessed selling pressure in the first half, but saw a sharp recovery in the second half, ultimately settling marginally lower at 22,945. The volatility index, India VIX, cooled off from 16.32 levels, declining 0.36% to 15.67. Technically, on the daily scale, Nifty has formed a hammer candlestick pattern near a multiple support zone, indicating strength. As long as the index holds the recent low of 22,725, a buy-on-dips strategy remains favorable. The 21-Day Simple Moving Average (DSMA) at 23,240 acts as an immediate hurdle, and a decisive move above this level could confirm a near-term bottom reversal,” said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates Ltd. (A Pantomath Group Company).
Key Nifty50, Sensex levels to watch out
According to Mahesh M Ojha, AVP — Research at Hensex Securities, bulls are accumulating at lower levels, and we are witnessing the Nifty 50 and Sensex rebound from their current crucial support at 22,750 to 22,800 and 74,800, respectively.
“The BSE Sensex is facing a hurdle at 76,550 to 76,600, which in the Nifty 50 terms comes at 23,050. So, Dalal Street’s mood may improve once these frontline indices breach this resistance on a decisive basis. However, it won’t be enough to establish that the Indian market has reached its bottom. This would remain a relief rally until the BSE Sensex breaks above 77,400 and the Nifty 50 index gives a fresh breakout at 23,800,” Ojha said.
Sumeet Bagadia, Executive Director at Choice Broking, says that Nifty 50 has made a strong base at 22,800, and in sustaining this support, can expect the key benchmark index to touch 23,300 soon.
“The market bias may improve once the frontline index closes above the 23,300 mark. A breakout above 23,800 on a closing basis would mean the Nifty 50 hitting 24,800 or 25,000 in the near term. As triggers for the market are expected to remain safe, one can maintain a stock-specific approach and look at those stocks that look strong on the technical chart,” Bagadia said.
