On Thursday, the benchmark indices experienced a recovery from the day's low but concluded in the red due to weak global cues. Investors have been adjusting their positions in anticipation of less aggressive Federal Reserve rate cuts following strong US retail sales and the resulting increase in global bond yields. Additionally, concerns about rising oil prices and escalating rates have disrupted global shipping and crude production.
The broader market continued to face selling pressure, driven by elevated valuations and profit booking as investors consider sector rotation.
Rupak De, Senior Technical Analyst at LKP Securities, noted that the Nifty slipped below the rising trendline on the daily chart, indicating a potential bearish trend reversal. The index has also fallen below a critical near-term moving average. De suggested that the trend might remain weak as long as the index stays below 21,550. A decisive move above 21,550 could weaken the bearish sentiment; until then, bears might maintain control.
De outlined the key support level at 21,400, and a drop below this level might lead the Nifty to revisit the range of 21,250-21,200. The technical analysis suggests that market participants should monitor these levels for potential shifts in market dynamics.
(With Agency Inputs)
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