Nifty Closed at 21,718; Nifty Prediction for Tomorrow
Nifty Prediction for Tomorrow
Market Analysis: Nifty Faces Bearish Trends Amidst RBI Decision and Economic Factors
The recent performance of the Indian stock market, particularly the Nifty index, has been marked by notable bearish trends.
The market on February 9th witnessed a significant downturn, with Nifty forming a long bearish candle on the daily chart.
Despite the challenging conditions, the index managed to retain the support levels of 21,700 and the 21-day moving average (21DMA).
This decline followed the Reserve Bank of India’s (RBI) decision to maintain the repo rate, resulting in a close below 21,750 for Nifty.
The broader market, as represented by the Sensex, also experienced a decline of 1.00 percent, dropping 723.57 points to 71,428.43, while Nifty closed at 21,718 with a weakness of 212.50 points or 0.97 percent.
Market Overview:
In terms of market breadth, 1341 shares saw an increase, 1908 shares declined, and 61 shares remained unchanged.
The BSE Midcap index closed flat, while the Smallcap index recorded a 0.4 percent decrease. Notable declines on Nifty were observed in Britannia Industries, ITC, Kotak Mahindra Bank, Axis Bank, and Nestle India.
On the other hand, State Bank of India, BPCL, Power Grid Corporation, TCS, and HCL Technologies emerged as the top gainers.
Sectoral Performance:
Sectoral indices played a crucial role in shaping the day’s market performance. Auto, Bank, Realty, Capital Goods, and FMCG sectors recorded declines ranging from 0.6 to 2 percent. In contrast, Oil & Gas, Power, IT, and PSU Bank indices closed 0.3 to 2 percent higher.
This sectoral divergence highlighted the varied impact of economic factors and regulatory decisions on different segments of the market.
Notable Stock Movements:
Britannia Industries, ITC, Kotak Mahindra Bank, Axis Bank, and Nestle India witnessed the most substantial declines on the Nifty, reflecting the bearish sentiment prevailing in the market.
State Bank of India, BPCL, Power Grid Corporation, TCS, and HCL Technologies, on the other hand, stood out as the top gainers, showcasing resilience amidst the broader market challenges.
Expert Analysis:
Aditya Gaggar, Director at Progressive Shares, emphasized the significance of the 22,000 level, which acted as a crucial threshold for bearish sentiments. He attributed heavy losses in private banking and FMCG stocks to the Monetary Policy Committee’s decision to maintain the status quo, resulting in a sharp correction in Nifty.
The index formed a long bearish candle on the daily chart but managed to hold on to the support of 21,700 levels and 21DMA.
These levels have now become immediate support for Nifty. Gaggar also highlighted the immediate resistance at 21,900 and suggested that a break below the support could extend the correction to 21,500. To resume an uptrend, Nifty needs a strong closing above 22,100.
Ajit Mishra of Religare Broking pointed out that the fall in leading stocks, particularly in private banks and ITC, pushed Nifty towards the crucial support of the 20-day exponential moving average (20 DEMA).
Mishra cautioned that if Nifty falls below 21,600, bulls may face challenges, and in such a scenario, it is advisable to hedge existing long positions and wait for clarity in market direction.
Jatin Gedia from Sharekhan conducted a detailed analysis of the daily chart, revealing a sharp decline in Nifty from the resistance zone of 22,000-22,050.
Despite repeated attempts, Nifty failed to surpass this resistance. Gedia identified support for Nifty at the 20-day moving average (21,694) and highlighted conflicting signals from the Hourly Momentum and Daily indicators.
While the Hourly Momentum indicator showed a negative crossover, the Daily indicator remained in buy mode. Gedia suggested that these mixed signals indicate potential consolidation in the short term, with Nifty possibly moving downward to the range of 21,500-21,435.
Bank Nifty Performance:
Bank Nifty experienced a substantial decline on the same day, closing in deep red. The consolidation zone of the last three trading sessions was broken on the downside, indicating increased bearish pressure.
Analysts expect this weakness to persist, with Bank Nifty potentially falling to the range of 44,430–44,000 in the short term. On the upside, immediate resistance is visible in the zone of 45,500–45,600.
Final Thoughts:
In conclusion, the recent market trends indicate a challenging environment characterized by bearish sentiments, influenced by factors such as the RBI’s decision on the repo rate and specific economic conditions.
While Nifty formed a long bearish candle, it managed to retain crucial support levels. Expert analyses from Aditya Gaggar, Ajit Mishra, and Jatin Gedia provide valuable insights into the key levels and potential scenarios for Nifty.
The divergent performance of sectoral indices and individual stocks underscores the complexity of the current market landscape.
Investors and traders are advised to exercise caution, monitor key support and resistance levels, and stay informed about evolving market conditions for effective decision-making.
