There was no trading in the Indian stock market on Monday due to Ganesh Chaturthi. In such a situation, investors are now eyeing the market opening on Tuesday. There were sharp fluctuations in the market in the last trading week and there was selling pressure most of the time.
The market had a weak start on Friday also. However, in the last one and a half hour of trading, good buying returned from lower levels. Due to this, Nifty 50 reduced a major part of its initial fall and closed with a weakness of about 80 points.
Weekly decline of about 2% in Nifty 50
If we look at the weekly performance, a decline of about 2 percent was recorded in Nifty 50. The market had started the week above the important level of 24,000, but after continuous selling it slipped to around 23,400 level.
Bank Nifty also could not escape the pressure. There was a weakness of about 1 to 1.25 percent in it throughout the week and it closed at the level of around 56,600.
Highest selling in realty sector
In sectoral performance, the most pressure was seen on realty stocks. Due to profit booking throughout the week, Nifty Realty Index fell by about 6.5 percent.
Apart from this, Metal and Auto sectors were also vulnerable to selling. On the other hand, some buying was seen from lower levels in IT stocks, due to which the decline in this sector was limited to some extent.
Many important support levels have been broken
According to market experts, the market picture currently looks weak on the technical charts. Many of the key support levels from which the market had experienced repeated recoveries have now been broken.
The market trend remains negative even on Weekly and Monthly charts. In such a situation, the current situation is indicating towards the strategy of ‘Sell on Rise’ i.e. selling on rise.
However, due to continuous fall, Nifty has now reached the extremely oversold zone. Its RSI is around 28-29 level. Due to such a weak situation, short term buying or bounce back may be seen at lower levels.
Buying opportunity may arise at Rs 23,100-23,200
According to experts, if there is a sharp decline in Nifty further and the index reaches the range of 23,100 to 23,200, then traders may get a chance for short term rebound there.
In case of such a possible bounce back, Nifty can re-test the zone of 23,600 to 23,700 on the upside. Therefore, these levels will be very important for the market in Tuesday’s trading.
‘Sell on Rise’ signal in Bank Nifty also
Bank Nifty currently seems to be trading in a limited range. However, selling pressure remains at upper levels. In such a situation, its technical structure is also indicating bullish selling.
What should investors do?
In the current market conditions, it may be better to exercise caution rather than making big bets in a hurry. According to experts, the next clear direction of the market will depend on consolidation and the outcome of upcoming global events.
At present, it is considered relatively safe to adopt the strategy of ‘Wait and Watch’. However, due to Nifty being in the extremely oversold zone, there is a possibility of one or two short term bounce backs after any sharp fall.
Disclaimer: This news is for information purposes only. This should not be considered investment advice. Investing in stock market is subject to risk. Before taking any investment related decision, definitely consult your financial advisor.
