The trends on Gift Nifty also indicate a flat to positive start for the Indian benchmark index. The Gift Nifty was trading around 21,620 level compared to the Nifty futures’ previous close of 21,595.
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On January 3, the benchmark indices ended lower for the second consecutive session as investors took profit in premium stocks.
The Sensex fell 535.88 points to close at 71,356.60, while the Nifty 50 ended 148.45 points, or 0.69%, lower at 21,517.35.
Nifty 50 formed a long negative candle on the daily chart, which put it on the verge of breaking below the immediate support of 10-Day EMA, which has offered support for the Nifty 50 for the past two months. This is not a good sign.
Read also: Indian stock market: 7 things that changed for the market overnight – Gift Nifty, US Fed minutes to fall in Apple shares
“The positive chart pattern as higher tops and bottoms is intact on the daily chart and current weakness could be in line with the formation of a new higher bottom of the sequence. However, there is currently no confirmation of a higher bottom reversal pattern,” said Nagaraj Shetty, Senior Technical Research Analyst, HDFC Securities.
He believes that the near-term trend for Nifty 50 is still negative and a decisive move below 21,500 levels could open the next downside of 21,255 (20-day EMA) and next 20,980 levels soon.
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Here’s what to expect from Nifty 50 and Bank Nifty today:
Nifty 50 Predictions
The Nifty 50 index dipped below the support level of 21,650, resulting in a decline to 21,500.
“The prevailing sentiment seems weak, highlighted by the index closing below the decisive support at 21,650. If it continues to drop below 21,500 in the coming days, it could potentially exacerbate the negative sentiment, especially with expectations of a large unwinding of writers below 21,500,” said Rupak De, Chief Technical Analyst at LKP Securities.
The broader market outlook suggests a selling strategy as long as it remains below 21,650, he added.
Read also: Buy or sell: Vaishali Parekh recommends three stocks to buy today — January 4
Bank Nifty Predictions
The Bank Nifty ended Wednesday on the day’s low, dropping 57 points to close at 47,705.
“The Bank Nifty experienced significant volatility on the day of the week’s expiry, maintaining a bearish trend as long as it remained below the key level of 48,000. The index, however, managed to sustain above its 20-day moving average (20DMA) support at 47,688. It is important for the index to hold this level, as a decisive break below it could intensify the selling pressure in the market,” said Kunal Shah, Chief Technical and Derivatives Analyst at LKP Securities.
Shah suggests that traders should closely monitor the movements around 48,000 and 47,688 for possible trend changes and trading opportunities.
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: 04 Jan 2024, 07:45 IST