Fundamental Overview
The Nifty 50 recently hit a new all-time high before
giving back some of the gains. The Indian stock market, like many others, is driven
by global risk sentiment. But idiosyncratic factors can weigh on performance,
nonetheless.
The aggressive US tariffs have been one of the main
negative factors for India this year. That hasn’t stopped the main upward trend
but slowed down the momentum.
On Friday, we have the RBI releasing their monetary
policy decision where a 25 bps cut in the repo rate is expected. The central bank
might also keep the rate steady, but the market will then focus on their
forward guidance to see whether they change their stance from neutral back to accommodative.
We have also the Fed releasing its policy decision
next week, and there’s a risk of a hawkish cut that could weigh on global risk
sentiment and negatively impact the Indian stock market too. If the Fed was to
lean on the dovish side, it should keep the positive risk sentiment intact.
Nifty 50 Technical Analysis – Daily Timeframe
On the daily chart, we can see
that the Nifty
50 briefly probed into a new all-time high before pulling back a bit. We have an
upward trendline defining the bullish momentum and it should act as a support. We
can expect the buyers to step in around these levels with a defined risk below
the trendline to position for a rally into a new all-time high. The sellers, on
the other hand, will want to see the price breaking lower to extend the pullback
into the 25,317 level next.
Nifty 50 Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more
clearly the support zone around the 25,900 level where we can find the
confluence of the most recent swing low and the trendline. Again, this is where
we can expect the buyers to step in to keep pushing into a new all-time high,
while the sellers will look for a break lower to increase the bearish bets into
the 25,317 level next.
Nifty 50 Technical Analysis – 1 hour Timeframe
On the 1 hour chart, there’s not much else we can add
here as the buyers will look for longs around these levels, while the sellers
will wait for a break to extend the drop into new lows.
Upcoming Catalysts
On Friday we have
the Reserve Bank of India interest rate decision. Next week, we have the FOMC decision on Wednesday.
This article was written by Giuseppe Dellamotta at investinglive.com.