Nifty ended lower on Monday after failing to hold early gains, with the index closing at 24,219.05, down 32.95 points, or 0.14%. It fell to an intraday low of 24,144 after touching 24,313 earlier in the session, before buying at lower levels helped it recover above 24,200.
The focus now shifts to the August F&O series expiry, with Nifty's ability to remain above its 50-day moving average near 24,194 likely to determine whether short covering emerges. The index has gained nearly 1% during the August series, while traders will also watch for a break from its four-day range of 24,026 to 24,313.
Nifty Holds Key Support on Closing Basis
Nifty came under selling pressure after its early advance and slipped below the previous session's low. During the decline, it also moved below the 50-day moving average and the 50% Fibonacci retracement level of the recent upswing on an intraday basis.
The index, however, held both levels on a closing basis. Monday's decline also ended a two-session recovery, with Nifty unable to extend its upward move.
The session formed a bearish candle with a small upper shadow and a longer lower shadow. The pattern showed selling at higher levels and buying interest closer to the day's lows.
Momentum Weakens Ahead of August Expiry
Short-term indicators also showed a loss of momentum. Nifty closed below the moving average ribbon on the hourly chart, while the hourly MACD produced a bearish crossover.
The RSI slipped below 50, while the MACD remained near the zero line, indicating weaker momentum after the recent recovery. With the index closing near important support levels, traders may wait for a clearer direction before taking fresh positions.
Market breadth remained negative, with weakness across the broader market. India VIX rose 2.94% to 11.52, while implied volatility increased to 12.29 from last Friday, pointing to greater caution ahead of the expiry session.
For the August F&O expiry, holding above 24,194 will remain important. Sustaining above that level could keep the possibility of short covering open, according to the technical analysis.
On the upside, the 24,313-24,360 zone is expected to provide immediate resistance. A sustained move above that range could improve the near-term outlook.
A break above or below the 24,026-24,313 range could provide Nifty with its next directional move. Until then, the index may continue to trade within its broader support and resistance levels.
Siemens Breaks Out of 13-Day Base
Siemens broke out of a 13-day flat base with higher trading volumes. Its relative strength line also moved to a new high, indicating continued outperformance against the broader market.
The stock is trading near its lifetime highs, while its short- and long-term moving averages continue to trend higher. The 30-week weighted moving average has also remained on an upward path and provided support during the recent consolidation.
Other indicators remain supportive, with the Bollinger Bands expanding upwards and the 14-period daily RSI moving back into the bullish zone.
A sustained move above Rs 4,100 could take Siemens towards Rs 4,270, according to the technical analysis. The suggested stop loss is Rs 3,970. If the stock sustains above Rs 4,270, Rs 4,400 would be the next level to watch.
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