Sudeep Shah, Head – Technical Research and Derivatives at SBI Securities.
The benchmark index Nifty began the week on a weak note, opening with a downside gap largely triggered by a selloff in the IT sector. The decline in Nifty IT was driven by geopolitical concerns after U.S. President Donald Trump announced a hefty $100000 fee on fresh H-1B visa applications, aimed at protecting American jobs.
Despite the negative start, the index showed early signs of recovery and climbed to an intraday high of 25331 within the first hour of trade. However, the rebound was short-lived as selling pressure resumed, dragging the index lower through the session. Eventually, Nifty settled at 25200, registering a loss of 0.49% for the day.
Among individual stocks, Adani Enterprises and Eternal stood out as the top gainers within the Nifty basket, while Tech Mahindra and TCS led the losers, reflecting the broader weakness in the IT space. Sectorally, Nifty IT was the worst performer, tumbling nearly 3%, followed by losses in Nifty Pharma and Nifty Healthcare. On the other hand, Nifty Media and Nifty Metal managed to post gains, offering some cushion to the overall market.
The broader market underperformed the headline indices, with Nifty Midcap 100 falling by 0.67% and Nifty Smallcap 100 declining by 1.17%. The advance-decline ratio was heavily skewed in favour of the bears, as 334 stocks from the Nifty 500 universe ended in the red, indicating widespread selling pressure across sectors.
Nifty View
The benchmark index Nifty ended in the red for the second straight trading session, reflecting continued profit booking after the sharp rally of over 1000 points. On the daily chart, it formed a bearish candle with shadows on both ends, indicating indecisiveness among market participants.
In the final hour of trade, the index found support near its 10-day EMA, which helped trigger a minor recovery from the day’s lows. However, technical indicators suggest waning bullish momentum, as the daily RSI slipped below the 60 mark and continues to trend downward.
Going ahead, the zone of 25080-25050 will act as immediate support for the index as the 38.2% Fibonacci retracement level of its recent upward move (24404-25448) is placed in that region. While, on the upside, the zone of 25330-25350 will act as a crucial hurdle for the index. Any sustainable move above the level of 25350 will lead to resume its northward journey. In that case, the index is likely to test the level of 25500 in the short term.
Bank Nifty View
The banking benchmark index Bank Nifty, closed in negative territory, extending its weakness and forming a bearish candle on the daily chart. Notably, the candle features a long upper shadow, which signals selling pressure at higher levels and a lack of follow-through on intraday gains.
Technically, this reflects hesitation among buyers and a possible shift in short-term sentiment. The daily RSI is currently quoting at 54 and continues to trend downward, indicating a gradual loss of bullish momentum and suggesting that the index may remain under pressure unless fresh buying emerges.
Talking about crucial levels, the zone of 54800-54700 will act as crucial support for the index. While, on the upside, the zone of 55600-55700 will act as an immediate hurdle.