The trends on Gift Nifty also indicate a negative start for the Indian benchmark index. The Gift Nifty was trading around 21,135 level compared to the Nifty futures’ previous close of 21,169.
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The domestic indices witnessed sharp selling on Wednesday with the Nifty 50 registering its biggest one-day fall in a year.
On December 20, the Sensex fell 930.88 points to end at 70,506.31, while the Nifty 50 ended 302.95 points, or 1.41%, lower at 21,150.15.
Nifty 50 has formed a engulfing pattern at the highs suggesting a possible downward reversal. The December 20th candle engulfed the candles of the previous three sessions and filled the uptrend formed on December 15th.
Read also: Indian stock market: 6 things that changed for market overnight – Gift Nifty, Wall Street sell to steady dollar
“Zooming into the 15-minute charts, we can observe that the Nifty has broken its previous support of 21,337 and there has also been a negative moving average crossover as the 20-period MA has moved below the 50-period MA. Momentum readings such as the 14-day RSI also declined sharply from overbought levels indicating loss of momentum. This is a negative signal for the near-term and it also implies that the Nifty has now entered a short-term downtrend,” said Subash Gangadharan, Senior Technical and Derivative Analyst, HDFC Securities.
Here’s what to expect from Nifty 50 and Bank Nifty today:
Nifty Open Interest Data
Speaking on the Open Interest (OI) data, Deven Mehata, Research Analyst at Choice Broking said on the call, the highest OI observed at 21,500 followed by 21,400 strike prices while on the put side, the highest OI is at 21,000 strike price
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Nifty 50 Predictions
The Nifty 50 underwent a sharp correction on December 20 as bearish sentiment continued.
“Nifty failed to sustain above 21,500, resulting in increased call writing at the 21,500 strike, later leading to a significant decline. At its lowest point, the Nifty fell just below 21,100 before recovering to close above that level. Looking ahead, there may be a consolidation phase for the Nifty soon,” said Rupak De, Chief Technical Analyst at LKP Securities.
He expects resistance to be around 21,500, while support is forecast at 21,100.
Read also: Day trading guide for the stock market today: Five stocks to buy or sell Thursday – December 21
Bank Nifty Predictions
The Bank Nifty index declined 426 points to close at 47,445 on Wednesday, forming a long bearish candlestick pattern in the daily time frame.
“The Bank Nifty index has experienced intense selling pressure, resulting in the formation of a bearish engulfing candle on the daily chart. The immediate resistance for the index lies at the 47,600-47,700 zone, and a break above this level could pave the way for further upside, targeting 48,000,” said Kunal Shah, Senior Technical & Derivative analyst at LKP Securities.
However, Shah believes that the general sentiment remains bearish, suggesting a cautious approach with a preference to sell on any upward movements.
Disclaimer: The opinions and recommendations made above are those of individual analysts or trading companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 21 Dec 2023, 07:47 IST