Amid the rising geopolitical tensions in the Middle East, a wave of selling pressure was observed across all sectors, with the exception of metals. This led the Nifty to close with a decline for the fifth consecutive session on October 25th. Despite the positive global market sentiments, the Nifty index opened strong but lost all its gains within the initial trading hours. Most of the trading during the first half was flat, but a downward trend emerged during the second half, causing the Nifty to slip below the 19,100 mark. The index concluded the day 159.60 points lower, settling at 19,117.20.
Market experts have noted that Nifty has broken through the lower band of the broadening formation, which was at 19,200. The next critical support that market watchers are eyeing is around the 18,830 level, which is the current 200 EMA.
Aditya Gaggar of Progressive Shares commented, “The Indian markets have been witnessing persistent selling. Bearish sentiments have strengthened their grip on the index, dragging it below the previous swing low of 19,220. By the end of the trading day, Nifty closed at 19,122.15, down by 159.60 points. Among the sectoral indices, only the metal and PSU banking indices closed in the green, while declines were seen in the media and IT sectors. The broader markets too experienced pressure. However, mid and small-cap stocks, which had already seen a decline in previous sessions, performed slightly better.”
Adding further insights, Gaggar mentioned, “After the head and shoulders breakout, we witnessed follow-up selling in today’s trade. The Nifty formed another bearish candle on the daily chart. The trend has turned negative, but currently, the index appears to be in an extremely oversold condition. Hence, the possibility of a relief rally cannot be ruled out.”
He also offered a short-term perspective, stating, “From a short-term viewpoint, there are concerns of Bank Nifty potentially descending to the 42,500 mark. If there’s a minor pullback intraday, one should consider selling. In the Bank Nifty, critical resistance is seen at 43,000 – 43,100, while support seems to be around 42,600 – 42,500.”
