On February 12, the Bharat stock market experienced a downturn as both the Nifty and Bank Nifty indices closed with negative sentiment. The Nifty, which opened strongly, took a sharp plunge during the day, ultimately closing at 21,616, down by 166 points. This decline was accompanied by a rise in the Bharat VIX, often referred to as the “fear indicator,” which increased by 3.98 percent intraday to reach 16.06. Such movements caused significant discomfort for investors, particularly the bulls who were hoping for positive trends.
The Bank Nifty, on the other hand, had been oscillating within a rangebound zone over the past three sessions. It closed just below the crucial 200-period Moving Average (MA) of the 44,900 level. This indicates a weakening bias and a slightly cautious sentiment among traders.
Market Outlook and Expert Analysis
According to Rajesh Bhosale, a Technical Analyst at Angel One, the recent downward pressure on the Indian markets hasn’t been attributed to significant alterations in global cues. However, it has particularly impacted recent top performers. Bhosale notes that the benchmark index breached a critical support level, the 20-period Exponential Moving Average (EMA), which had previously held firm over the past two sessions. This breach suggests the potential for further weakness in the short term. He predicts that the Nifty may continue to remain range-bound with 21,500 serving as a strong support level. However, he warns of a potential downward path towards 21,350 – 21,250 in the upcoming sessions.
Conversely, Bhosale highlights resistance levels at 21,800 – 21,850, which have acted as barriers in the previous two sessions. He advises traders to reduce long positions during any price rebounds and to refrain from bottom fishing until clear signs of strength emerge.
Prabhudas Lilladher, a brokerage firm, also echoes similar sentiments. They emphasize the importance of the support zone near the 21,500 level and highlight the crucial support at the 50-period EMA zone of 21,300 levels. They suggest that while the support for the day is seen at 21,500, resistance is observed at 21,750.
Bank Nifty Analysis and Future Projections
According to Samco Securities, Bank Nifty witnessed intense selling pressure on an intraday basis, closing at 44,882, down by 752 points. This selling pressure was evident across various strike prices, with put writers (bulls) exiting and call writing (bear entry) seen from 45,000 to 46,000 strikes. The activity led to a sharp intraday fall in Bank Nifty.
Om Mehra, a Technical Analyst at SAMCO Securities, notes the significant decline in PSU banks, experiencing a 4.66 percent decline. None of the Nifty Bank constituents closed in the green, indicating intense selling across the sector. Mehra observes a large red candle engulfing the entire previous day’s body and highlights the slip below the crucial 200 DMA after a considerable period.
Mehra warns of the combined weakness in PSU and private banking stocks, which could potentially drag the index to levels of 44,000-43,800, with formidable resistance observed around 45,600. He advises caution, considering the possibility of a fake minor pullback leading to a further downturn.
In conclusion, the Indian stock market is currently facing bearish sentiments, with both the Nifty and Bank Nifty indices experiencing significant downward pressure. Analysts warn of potential further weakness in the short term, advising traders to tread cautiously and closely monitor support and resistance levels for future trading decisions.
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