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Monday, August 05, 2024

Bearish Momentum: Sensex and Nifty Breach Key Technical Levels, Close Below 20-Day SMAs

 

                In a significant downturn, the Sensex settled the day at 78,759.40, down 2,222.55 points or 2.74 per cent. Nifty fell 662.10 points, or 2.68 per cent, to close at 24,055.60. The NSE Nifty50 and the BSE Sensex on Monday violated their 20-day simple moving averages with ease and settled the day below the Budget Day (July 23) levels, forming long bearish candles on the daily chart. Analysts said the market momentum has turned weak. The indices are now near their 50-day EMAs (Sensex: 78,709.50, Nifty: 23,960.30. If the indices fall further, 78,300 level on Sensex and 23,900 on Nifty looks likely, they said.

Technical Analysis and Market Sentiment

"Technically, Nifty and Sensex closed below 20-day SMAs after a long time, which is largely negative," said Shrikant Chouhan, Head Equity Research, Kotak Securities. The indices also formed long bearish candle on the daily chart, which supports further weakness from the current levels, he said. On Monday, Sensex settled the day at 78,759.40, down 2,222.55 points or 2.74 per cent. This was below the level of 80,429.04 that the 30-pack index settled on July 23. Nifty plunged 662.10 points, or 2.68 per cent, to close at 24,055.60. This was lower than a low of 24,074.20 level that Nifty hit on July 23.

 

Immediate Outlook and Key Levels

"We are of the view that the current market texture is weak and volatile, but due to temporary oversold conditions, we could expect one intraday pullback rally. For day-traders, Nifty and Sensex levels of 24,000 and 78,500 would be the immediate reference point. Above the same, we could expect intraday pullback up to 24,150-24,250 and 79,000-79,300 levels, respectively," Chouhan said. With the Sensex settled the day at 78,759.40, down 2,222.55 points or 2.74 per cent, and Nifty fell 662.10 points, or 2.68 per cent, to close at 24,055.60, the immediate focus will be on how the market responds to these new technical levels.


 

Broader Market Impact

The sharp decline in the Sensex, which settled the day at 78,759.40, down 2,222.55 points or 2.74 per cent, and Nifty, which fell 662.10 points, or 2.68 per cent, to close at 24,055.60, has broader implications. The market’s breach of key technical levels has turned sentiment negative, with analysts predicting further downside if support levels do not hold. The NSE Nifty50 and the BSE Sensex on Monday violated their 20-day simple moving averages with ease and settled the day below the Budget Day (July 23) levels, forming long bearish candles on the daily chart. Analysts said the market momentum has turned weak. The indices are now near their 50-day EMAs (Sensex: 78,709.50, Nifty: 23,960.30. If the indices fall further, 78,300 level on Sensex and 23,900 on Nifty looks likely, they said.

Sectoral Performance and Key Movers

The market rout was broad-based, with all sectors witnessing significant declines. Sensex settled the day at 78,759.40, down 2,222.55 points or 2.74 per cent. Nifty fell 662.10 points, or 2.68 per cent, to close at 24,055.60. The financials, IT, and energy sectors were among the hardest hit. The NSE Nifty50 and the BSE Sensex on Monday violated their 20-day simple moving averages with ease and settled the day below the Budget Day (July 23) levels, forming long bearish candles on the daily chart. Analysts said the market momentum has turned weak. The indices are now near their 50-day EMAs (Sensex: 78,709.50, Nifty: 23,960.30. If the indices fall further, 78,300 level on Sensex and 23,900 on Nifty looks likely, they said.


 

Investor Sentiment and Market Strategy

Investor sentiment has turned cautious with the Sensex settled the day at 78,759.40, down 2,222.55 points or 2.74 per cent, and Nifty fell 662.10 points, or 2.68 per cent, to close at 24,055.60. The breach of key technical levels has led to concerns about the short-term direction of the market. The NSE Nifty50 and the BSE Sensex on Monday violated their 20-day simple moving averages with ease and settled the day below the Budget Day (July 23) levels, forming long bearish candles on the daily chart. Analysts said the market momentum has turned weak. The indices are now near their 50-day EMAs (Sensex: 78,709.50, Nifty: 23,960.30. If the indices fall further, 78,300 level on Sensex and 23,900 on Nifty looks likely, they said. For investors, it is a time to reassess portfolios and consider the risk of further declines.

Expert Opinions and Future Outlook

Market experts have weighed in on the recent decline. "Technically, Nifty and Sensex closed below 20-day SMAs after a long time, which is largely negative," said Shrikant Chouhan, Head Equity Research, Kotak Securities. The indices also formed long bearish candle on the daily chart, which supports further weakness from the current levels, he said. On Monday, Sensex settled the day at 78,759.40, down 2,222.55 points or 2.74 per cent. This was below the level of 80,429.04 that the 30-pack index settled on July 23. Nifty plunged 662.10 points, or 2.68 per cent, to close at 24,055.60. This was lower than a low of 24,074.20 level that Nifty hit on July 23.


 

Strategies for Traders

For traders, the immediate focus will be on key technical levels. "We are of the view that the current market texture is weak and volatile, but due to temporary oversold conditions, we could expect one intraday pullback rally. For day-traders, Nifty and Sensex levels of 24,000 and 78,500 would be the immediate reference point. Above the same, we could expect intraday pullback up to 24,150-24,250 and 79,000-79,300 levels, respectively," Chouhan said. The Sensex settled the day at 78,759.40, down 2,222.55 points or 2.74 per cent, and Nifty fell 662.10 points, or 2.68 per cent, to close at 24,055.60. Traders should watch for these levels as potential points for short-term trading opportunities.

In conclusion, the market's recent performance with the Sensex settled the day at 78,759.40, down 2,222.55 points or 2.74 per cent, and Nifty falling 662.10 points, or 2.68 per cent, to close at 24,055.60, highlights the volatility and caution prevailing in the market. The NSE Nifty50 and the BSE Sensex on Monday violated their 20-day simple moving averages with ease and settled the day below the Budget Day (July 23) levels, forming long bearish candles on the daily chart. Analysts said the market momentum has turned weak. The indices are now near their 50-day EMAs (Sensex: 78,709.50, Nifty: 23,960.30. If the indices fall further, 78,300 level on Sensex and 23,900 on Nifty looks likely, they said. Investors and traders alike should closely monitor these levels and adjust their strategies accordingly to navigate the current market landscape.

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