Last week, the Indian stock market faced a significant
downturn due to various factors including foreign institutional investors
selling, profit-taking ahead of the ongoing Lok Sabha Election, a cautious
stance by the US Federal Reserve on interest rates, mixed corporate quarterly
results, and a spike in India VIX, commonly known as the fear index, by over 25
percent on a weekly basis.
Additionally, Brent crude oil prices surged to $82.79 per
barrel.
Nifty outlook : On May 10th, Nifty closed at
22055.20, hitting a high of 22131.30 and a low of 21950.30. On March 20th,
2024, it hit a low of 21710, and on April 19th, it hit a low of 21770. The
momentum indicator RSI found support at the 40 level on those two days, leading
to a market rebound to all-time high levels of 22800. However, on May 3rd,
Nifty encountered resistance at the 22800 level and formed a significant
bearish engulfing candlestick pattern on the daily chart. By May 7th, 2024, it
broke below the 20 EMA and the RSI also dropped below the 50 line, resulting in
a sharp decline to the 21950 level.
Looking ahead, the key question is, what will Nifty do next
week? The high of 22131 and the low of 21950 from last Friday will serve as
resistance and support levels, determining Nifty's direction. If it breaks
below the 21950 level and stays there convincingly, accompanied by the RSI
dropping below the 40 level, we could witness a significant downward movement
towards the 21700-21750 zone.
Conversely, if Nifty manages to trade above the 22131 level
with strong volume and the RSI finds support at the 40 level (which it
currently does), we may see a temporary rebound towards the 22300 level.
However, Nifty could encounter resistance at that point, and the RSI might
struggle to surpass the 50 level, potentially leading to a range shift in Nifty
50.
Bank nifty on the other hand, has been already in the bearish
zone from last week after taking resistance from the top of the channel and made
a shooting star candle on as per daily chart. Last Friday it made a high
of 47868.70 and a low of 47313.35 closed at the bottom of the channel. If it
breaks 47313 level and trade decisively it can go down to 46000 level where it
can take support and RSI also at 40 level support. If both are broken we can
see a massive selling pressure in Bank nifty in coming days.
On Monday(13 th May), in both the indices of Nifty and Bank
nifty there may be some pullback we may experience as both are on their support
lines. But in every rise we may see selling, as the market is in sell on rise
mode.
Disclaimer: The information provided on MoneyWiseMind is for educational and informational purposes only. It is not intended to be financial advice, and you should not rely on it as such. Before making any financial decisions, you should consult a licensed financial advisor.
