The Indian stock market exhibited signs of weakness on Wednesday as the Nifty index remained in a bearish trend, with technical indicators pointing towards further short-term challenges. The India VIX, a measure of market volatility, closed at 18.44, down by 1.25% from the previous session.
Analysts noted that Nifty's 20EMA and 50EMA are in a bearish crossover, with the RSI momentum indicator also reflecting bearish sentiments. The index has been consolidating between 23,400 and 23,800, failing to reclaim the 20EMA. A decisive move above 23,800 could trigger a strong rally, while a fall below 23,400 may induce panic in the market.
In the US, major indices traded in the green ahead of Nvidia's earnings, with the Dow 30 at 49,469.56, down 0.21%, the S&P 500 lower by 0.42% at 7,384.28, and the Nasdaq Composite down by 0.61% at 26,029.62. European markets also showed positive trends, with indices like the FTSE 100 and Dax rallying between 0.18% and 0.69%.
“Overall, sentiment remains weak, and this weakness may continue in the short term as long as the index stays below 23,800. On the other hand, a decisive move above 23,800 could trigger a strong rally. At the lower end, a fall below 23,400 may induce panic in the market.”
Rupak De, Senior Technical Analyst at LKP Securities
Nilesh Jain from Centrum Finverse highlighted that Nifty opened with a gap-down but rebounded strongly from the support zone near 23,400, forming a bullish candle on the daily chart. The immediate hurdle is the 50-DMA at 23,730, with a breakout needed for an upward move towards 24,000. The India VIX cooled off by 2% to 18.30, providing potential comfort to the bulls.
Active stocks in terms of turnover included GMR Airports, Maruti Suzuki, and MTAR Technologies, while in volume terms, GMR Airports and Vodafone Idea were among the most traded. Stocks like Deccan Gold Mines and Apollo Micro Systems saw strong buying interest, while Bharat Electronics Limited and Tech Mahindra faced selling pressure.
“The broader structure remains range-bound, and we expect the Nifty to trade within the 23,300–24,000 range, with these levels acting as key support and resistance respectively. Meanwhile, the volatility index, ‘INDIAVIX’, cooled off by 2% to 18.30 levels, and any further decline in volatility is likely to provide additional comfort to the bulls.”
Nilesh Jain, Vice President - Head of Technical and Derivative Research at Centrum Finverse
The broader market sentiment remained mildly negative, with 2,035 stocks advancing and 2,084 declining out of 4,310 traded on the BSE. The Sensex settled with minor gains, aided by Reliance Industries, Axis Bank, and Mahindra & Mahindra.
Background
The Indian stock market has been experiencing fluctuations due to various global and domestic factors, including economic data releases and corporate earnings. The Nifty index's technical indicators, such as EMA crossovers and RSI, are closely watched by traders to gauge market sentiment and potential future movements.
As the market continues to navigate through these trends, investors should keep an eye on key technical levels and global market cues. The potential for a breakout above 23,800 or a dip below 23,400 will be crucial in determining the market's direction in the coming days.
