Nifty and Bank Nifty end weaker; analysts flag 23,600 support and stock trade setups

The Indian stock market extended losses for the fifth consecutive session, with Sensex and Nifty tumbling more than 1% intraday before paring most of the losses and closing 0.4% lower each on Friday as oil prices above $100 per barrel, FII selling and other factors spooked investors.Analyst Sudeep Shah, Vice President and Head of Technical & Derivatives Research at SBI Securities, interacted with ETMarkets regarding the outlook for the Nifty and bank, as well as an index strategy for the upcoming week. The following are the edited excerpts from his chat:Nifty slipped over 2% this week, plunging in all five sessions. What is your view on Nifty going forward?Last week, the benchmark Nifty index traded within a narrow range during the first two trading sessions. However, selling pressure intensified during the final three sessions, resulting in a sharp correction. Eventually, the index ended the week at 23,767 level, registering a decline of 2.33%. A sharp surge in Brent crude oil prices amid the escalation of the US-Iran conflict, coupled with a notable rise in the US 10-year bond yield, weighed heavily on investor sentiment across global markets. Amid this sharp deterioration in sentiment, Friday’s price action offered the first sign that the decline may be approaching a crucial juncture.On Friday, the index found support near the 61.8% Fibonacci retracement level of its recent upward rally from 23,070 to 24,531 and staged a modest pullback. Consequently, the index formed a bearish candle with a small lower shadow on the weekly chart, indicating some buying interest at lower levels. Notably, Friday’s recovery was largely driven by strength in the large-cap space. While the Fibonacci support triggered a pullback, the momentum indicators tell a more cautious story beneath the surface.From a technical perspective, the index is currently trading below its key short and long-term moving averages, while the 20-day and 50-day EMAs are trending lower, reflecting weakening momentum. The daily RSI is hovering around the 43 mark and remains below its 9-day average, indicating subdued momentum. Meanwhile, the MACD histogram continues to remain below the zero line, further reinforcing the prevailing bearish undertone. With momentum still tilted in favour of the bears, the battle now shifts to a crucial support zone that could determine the index’s next directional move.Going ahead, the 23,650–23,600 zone will act as an important support area for the index. A sustained move below 23,600 could extend the correction towards 23,450, followed by the 23,300 level. On the upside, the 50-day EMA zone of 23,950–24,000 is likely to act as an important hurdle. Rough week for bank stocks as the index declined over 3% this week. How are charts looking for Bank Nifty?The Bank Nifty witnessed heightened volatility during the week. After scaling a high of 58,228, the index came under sharp selling pressure and underwent a meaningful correction. However, buying interest emerged near the 56,000 level, helping the index stage a strong recovery from lower levels. Despite the rebound, Bank Nifty ended the week around 56,700, registering a loss of more than 3%.On Friday, the index briefly slipped below its crucial 200-day EMA, indicating weakness in the broader trend. However, it managed to recover and close above this long-term moving average, highlighting the importance of this support zone. Meanwhile, momentum indicators and oscillators are currently signalling a sideways to range-bound trend, suggesting a lack of strong directional momentum in the near term.Going forward, the 56,000-55,800 zone is expected to act as a key support area, as it coincides with the 50% Fibonacci retracement of the previous upward rally. A decisive and sustained breakdown below 55800 could trigger another round of selling pressure, paving the way for a sharper correction towards 55,000, followed by 54,400 in the short term.On the upside, the 20-day EMA zone of 57,300-57,400 is likely to remain a significant resistance hurdle. Any pullback rally is expected to face supply pressure around this region, and a sustained move above it would be required to improve the near-term technical outlook.What is the options data indicating about Nifty's near-term trading range, and where are the key Call and Put positions building up ahead of the Monthly expiry?The Put Call Ratio (PCR) slipped from 1.13 on July 17 to 0.68 on July 23 as bears attempted to gain the upper hand. Following the sharp pullback from 23,600 levels on July 24, the PCR improved to 0.83. Despite this recovery, call writers maintained dominance at the week’s close. Over the past four sessions, a steady rise in open interest alongside falling prices has signaled the buildup of short positions in index futures. For context, Nifty had been consolidating within the 24,531–23,785 band for 28 sessions and the July 24 close below the lower end of this range confirmed a breakdown, raising concerns of further downside.On the downside, the 23,600 strike carries significant put open interest, with put writing nearly eight times higher than call writing. This level is a crucial support zone, coinciding with the strong buying seen on July 24 after Nifty’s gap closed. Ahead of the monthly expiry, Nifty is most likely to hold this level, though any decisive breach could trigger put writers’ exit and accelerate near term weakness. On the upside, the 24,000 strike has notable call open interest, with call writing nearly three times higher than put writing, making it a strong resistance zone to watch as expiry approaches.What are some stocks that are looking good for the week ahead?Despite the broader market weakness, a few stocks continue to display strong relative strength and positive technical setups. HAL, Manappuram Finance, Titan, and United Spirits are currently looking promising and could remain in focus in the week ahead. Their resilient price structures and favorable momentum indicators suggest the potential for outperformance.Can you share your outlook on Bluestone, HDFC Bank, Infosys, and IndusInd?Bluestone delivered its strongest ever weekly close, surging nearly 29% following its quarterly results. The stock now trades comfortably above key short and long term moving averages, with a rising ADX signaling robust trend strength. The MACD’s expanding green histogram bars further reinforce bullish momentum. While a phase of healthy profit taking cannot be ruled out given RSI and ADX nearing peak levels, immediate support lies in the Rs 710–700 zone. The bullish bias is expected to persist as long as the stock holds above this zone.HDFC Bank ended the week with a sharp 9% loss, recording lower closes across all five sessions. The stock trades well below its key moving averages and has closed below the lower band of the Bollinger Band for four consecutive days, a sign often associated with strong trends. RSI has slipped below 40, reflecting growing bearish momentum. The Rs 725–720 zone remains a critical support, and a decisive breach could trigger further weakness.Infosys slipped over 5% for the week, closing below its key moving averages. The RSI continues to fall, indicating bearish momentum, while DI has crossed DI+ on the ADX with widening lines, underscoring strong seller control. The MACD line remains below the zero line on both daily and weekly charts, reinforcing the bearish bias. As long as the stock trades below the Rs 1,075–1,080 zone, weakness is likely to persist.IndusInd Bank attempted a consolidation breakout on July 21 but failed to sustain higher levels, slipping below its 20 day EMA after quarterly results. RSI dropped sharply from 73 to 52, signaling loss of bullish momentum, while the MACD line crossing below the signal line points to building downside pressure. Unless the stock reclaims the Rs 1,045–1,050 zone, it is likely to remain under pressure.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

Nifty’s five-day slide has pushed it to a several-week low and below its 50-day exponential moving average, raising the risk of a deeper correction, says Rupak De of LKP Securities. He sees 23,600 as the immediate support; a decisive breach could accelerate selling. The market’s broader trend will remain weak unless the index reclaims the 24,000 mark, he said.Edited excerpts from a chat:The five-day non-stop selling has revived concerns of a longer downturn in the market. What does the weekly candle indicate on where we are likely to end the July series?The Nifty slipped from the consolidation on the daily chart on Thursday, with follow-up selling taking the index to 23600 on Friday. Besides, the index has fallen below the 50 EMA as well, confirming a new downtrend for the short term. The weekly chart looks more scary. Over the last four weeks, the Nifty has failed to rise above the 50-week EMA, as sellers remained strong at the higher levels while buyers remained fragmented. Now that the Nifty has closed at a several-week low, the chances of further weakening look imminent. Immediate support is placed at 23600. A fall below 23600 might trigger a severe correction, as investors would be running away, putting the Nifty at greater downside risk. On the higher end, 24000 will become the line of polarity. Unless the Nifty moves higher to reclaim 24000, the broader trend is likely to remain weak.Banking stocks triggered the initial correction, but selling subsequently spread across sectors. Is Bank Nifty still leading the market lower, and where do you see its next support?A few days back, the banking big boys were trading with their loud voices, especially ICICI Bank and SBI. But in the last two days, the scenario has changed, with the market being pulled down by stocks like HDFC Bank, SBI, and Axis Bank. The index has slipped below both the medium-term 200 DMA and the short-term 50 EMA. The RSI is in a bearish crossover and falling, indicating weakening momentum. The situation looks a bit weak, and banking stocks might weaken further, at least as long as the index remains below 57000. On the lower end, support is placed at 56000/55000.India VIX moved higher as crude oil crossed $100 and foreign investors continued selling. What are the options data, open-interest structure and volatility indicators signalling for the coming week?Panic rose as Brent Crude futures climbed above $100, sending India VIX above its 200 DMA. However, it was short-lived for the time being, as India VIX retreated due to some correction in crude oil prices. A short-term cap is placed at 15. The next round of panic might overwhelm the market if India VIX crosses above 15. Call writers have increased their positions at the 24000 and 23800 strikes, while put writers have shifted their positions down to the 23500 strike.HDFC Bank ended the week over 9% lower after its earnings-triggered breakdown. Is the stock now technically oversold, or do the charts indicate another leg of downside?The shares of HDFC Bank have given a breakdown from their recent consolidation as traders exited the stock following the quarterly earnings. The stock has corrected well below its 50 EMA, confirming deep short-term weakness. The stock has broken below its short- to mid-term support of 770. On the weekly chart, the stock is on the verge of falling to a 52-week low, while the weekly RSI has entered a bearish crossover. It looks weak, with the potential for further sharp cuts, and appears to be a good sell-on-rise stock.Bajaj Auto jumped more than 5% following its results, while M&M Financial Services surged nearly 8% in a session. Are these sustainable breakouts with scope for follow-through, or isolated earnings-driven spikes in a weak market?Both the stocks have witnessed quality breakouts and look very good for further upside. Both the stocks are showing very strong chart structures. However, the overall market weakness might weigh on the individual stocks and hold them back from gaining in the short term. Once the sell-off subsides, these two stocks might resume their strong rally.Give us your top ideas for the week ahead.Buy LTM 4091 SL 3950 TGT 4300The stock has formed an engulfing candle on the daily chart. The RSI is in a bullish crossover, indicating strong momentum. Besides, the price has risen above the 50 EMA on the daily timeframe. The stock looks good on the charts, with decent potential to rise towards 4300. On the lower end, support is placed at 3950.Buy EMMVEE 331 SL 317 TGT 350The stock has formed a bullish engulfing candle on the daily chart near the support of the 50 EMA, making the pattern more significant and indicating the possibility of a decent rally in the near term. The RSI is in a bullish crossover, indicating strong momentum. The stock looks promising on the charts, with the potential to rise towards 350. On the lower end, support is placed at 317.Buy RRKABEL 2493 SL 2400 TGT 2650The stock is in uptrend on the daily timeframe with higher top higher bottom formation. Besides, the price has been sustaining above 50EMA. The RSI is in bullish crossover and rising. The stock looks good on the charts, with decent potential to rise towards 2650. On the lower end, support is placed at 2400.