The Indian equity benchmarks ended extended their losses for the fourth consecutive session on Monday, as unfavorable global cues surrounding the West Asia crisis weighed on the indices and oil edged higher. Analysts expect the short-term market texture to remain weak.
"From a technical standpoint, Nifty continues to trade below all key moving averages, indicating a prevailing downtrend across timeframes," said Nandish Shah, Deputy Vice President at HDFC Securities.
Accordingly, the index will find immediate support at 23,262 level, while on the flipside the 23,700–23,800 zone is likely to act as a crucial resistance band.
Any further downmove from the immediate support levels, could push the index lower toward the 23,000 level, highlighted Shah.
At 10:50 pm, GIFT Nifty hinted at a negative start for the Dalal Street on Tuesday as it traded around 23,384, down nearly 80 points or 0.35% after crude oil prices continued to rise.
However, Shrikant Chouhan, Head Equity Research at Kotak Securities pointed out that while in the short-term weakness is likely to continue, "temporary oversold conditions" could trigger a technical bounce back from the current levels. At the same time, Chouhan underlined that Nifty has formed a bearish candle on the daily charts.
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Nifty Bank
The near-term bias for the Nifty Bank index remains negative as it extended losses for the second straight session and continues to form a sequence of lower highs and lower lows on the daily charts.
The immediate support is placed in the 53,300 and 53,000 zone, said Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities.
"A breach below this region could trigger further downsides toward 51,915, followed by 50,666," he added. On the flipside, the breakdown zone of 54,300–54,500 is likely to act as a strong resistance, and only a sustained move above this region can revive bullish momentum.
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Market Recap
Nifty ended below 23,400 level for the first time since May 13 while Sensex closed over 500 points lower. The Nifty 50 fell as much as 0.70% to 23,382.60 after rising as much as 0.8% to 23,733.70 earlier in the session. The Sensex fell as much as 0.68% to 74,267.34, nearly 1,000 points below the day's high of 75,357.93.
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