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What is the story about?
It was only a few sessions ago that we were talking to you about the Nifty looking to cross the 23,700 - 23,800 congestion zone on the upside for a move back towards the 24,000 mark. For a brief period, that did happen too. That's the more important part, the period was brief.
In the eight trading sessions since the May 26 high of 24,089, the Nifty has lost over 1,000 points if we consider Monday's intraday low of 23,070.
The market had entered the new trading week with the hope that last week's low of 23,151 would at least be defended and would become a near-term base for the index. That was not to be.
Multiple reasons. One of course was the sell-off on Wall Street last Friday. That sparked a sharp sell-off in Asian equities on Monday morning too. However, that was the unravelling of the AI theme and in stocks that had led those indices to record levels through the month of May.
If one thinks about it, a fall in AI names would generally be beneficial for a market like India, which has missed out on the AI rally due to the lack of such stories.
But there were many other factors that dampened sentiments. First was the escalation in the tensions between Iran and Israel in West Asia. The resultant rise in oil prices impacted Indian equities. The rise in oil prices also impacted the currency, which gave up nearly three-quarters of Friday's gains.
A major part why the Nifty losses were in check for a better part of the last week was the outperformance of the Nifty Bank, which was on a four-day winning streak. The banking index underperformed on Monday, dragging the Nifty lower with it, further hurting sentiments.
As of now, Iran has announced cessation of operations against Israel, which has resulted in a sharp recovery in the US futures and a fall in crude oil prices from the highs.
A de-escalation may result in a bounce from oversold levels for our own markets, but there are other factors, such as the relentless FII selling that the market has been grappling with.
Tuesday's session will also be the weekly options expiry for the NSE contracts.
Barring Thursday and Friday last week, the Nifty has consistently been making lower lows on the chart and Monday was no different. The bulls would first look to defend the 23,070 level on the downside and a break below that could bring levels of 23,000 into play, followed by further downside towards 22,800 - 22,700 levels.
However, with a further deterioration in the Put-Call Ratio towards oversold levels of 0.6, the index generally stages a bounce from there. In case that does happen, the extent of the bounce will have to be monitored and also whether selling pressure re-emerges at higher levels.
Monday's high of 23,266 will be the first level to watch on the upside, and that is still over 140 points away from Monday's close.
Shrikant Chouhan of Kotak Securities said that the weakness in the market may continue until the Nifty sustains above the mark of 23,250. Immediate support on the downside is at 22,950 and a further downside could drag the mark back to 22,800 levels. On the upside, a sustained move above 23,250 can open further upside back towards 23,350 - 23,400 levels in a pullback move. He advises level-based trading to avoid the risk of intraday volatility.
"The underlying trend of Nifty is weak and a decisive move below the support of 23,100 could open more weakness down to 22,700 levels in quick period of time. Immediate resistance is placed at 23,250," said Nagaraj Shetti of HDFC Securities.
Rupak De of LKP Securities is taking an optimistic tone. He observed the formation of a inverted hammer candlestick pattern, offering some hope for a short-term reversal. He said that the Nifty can move back to the 23,250 - 23,300 levels in case it sustains above the mark of 23,125. On the downside, a move below 23,070 will invalidate the pattern and drag the index further down below the 23,000 mark, he added.
In the eight trading sessions since the May 26 high of 24,089, the Nifty has lost over 1,000 points if we consider Monday's intraday low of 23,070.
The market had entered the new trading week with the hope that last week's low of 23,151 would at least be defended and would become a near-term base for the index. That was not to be.
Why Did The Markets Fall On Monday?
Multiple reasons. One of course was the sell-off on Wall Street last Friday. That sparked a sharp sell-off in Asian equities on Monday morning too. However, that was the unravelling of the AI theme and in stocks that had led those indices to record levels through the month of May.
If one thinks about it, a fall in AI names would generally be beneficial for a market like India, which has missed out on the AI rally due to the lack of such stories.
But there were many other factors that dampened sentiments. First was the escalation in the tensions between Iran and Israel in West Asia. The resultant rise in oil prices impacted Indian equities. The rise in oil prices also impacted the currency, which gave up nearly three-quarters of Friday's gains.
A major part why the Nifty losses were in check for a better part of the last week was the outperformance of the Nifty Bank, which was on a four-day winning streak. The banking index underperformed on Monday, dragging the Nifty lower with it, further hurting sentiments.
What Is The Current Market Situation?
As of now, Iran has announced cessation of operations against Israel, which has resulted in a sharp recovery in the US futures and a fall in crude oil prices from the highs.
A de-escalation may result in a bounce from oversold levels for our own markets, but there are other factors, such as the relentless FII selling that the market has been grappling with.
Tuesday's session will also be the weekly options expiry for the NSE contracts.
What Are The Key Nifty Levels To Track?
Barring Thursday and Friday last week, the Nifty has consistently been making lower lows on the chart and Monday was no different. The bulls would first look to defend the 23,070 level on the downside and a break below that could bring levels of 23,000 into play, followed by further downside towards 22,800 - 22,700 levels.
However, with a further deterioration in the Put-Call Ratio towards oversold levels of 0.6, the index generally stages a bounce from there. In case that does happen, the extent of the bounce will have to be monitored and also whether selling pressure re-emerges at higher levels.
Monday's high of 23,266 will be the first level to watch on the upside, and that is still over 140 points away from Monday's close.
Nifty Is A Buy Or Sell?
Shrikant Chouhan of Kotak Securities said that the weakness in the market may continue until the Nifty sustains above the mark of 23,250. Immediate support on the downside is at 22,950 and a further downside could drag the mark back to 22,800 levels. On the upside, a sustained move above 23,250 can open further upside back towards 23,350 - 23,400 levels in a pullback move. He advises level-based trading to avoid the risk of intraday volatility.
"The underlying trend of Nifty is weak and a decisive move below the support of 23,100 could open more weakness down to 22,700 levels in quick period of time. Immediate resistance is placed at 23,250," said Nagaraj Shetti of HDFC Securities.
Rupak De of LKP Securities is taking an optimistic tone. He observed the formation of a inverted hammer candlestick pattern, offering some hope for a short-term reversal. He said that the Nifty can move back to the 23,250 - 23,300 levels in case it sustains above the mark of 23,125. On the downside, a move below 23,070 will invalidate the pattern and drag the index further down below the 23,000 mark, he added.
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