Weak Global Cues and Bearish Charts Cloud Indian Equities Ahead of July 21 Trade
It’s a cautious Monday morning for Indian equities. Following a week that saw the Nifty 50 break below the 25,000 mark and the Sensex drop over 500 points, market signals heading into July 21 suggest a subdued open. With the Gift Nifty indicating a mild discount from futures, and a slew of bearish technical patterns emerging, investors are preparing for a sluggish session—if not a mild correction.
Gift Nifty Signals Tepid Start
As of early trade indications, the Gift Nifty hovered around the 25,019 mark—a modest discount of 13 points from Nifty futures’ previous close. This mild discrepancy sets the tone for a flat-to-negative start for benchmark indices.
Global market cues are hardly inspiring either. Asian markets were mixed, with tech-heavy indices such as the Nikkei and Hang Seng struggling under the weight of disappointing earnings forecasts from U.S. majors. Meanwhile, commodities traded flat, and crude oil prices held steady near the $82/barrel range, limiting any potential upside for energy-linked stocks.
Week-End Recap: A Slide Below Key Levels
Last Friday painted a somber picture for bulls. The Sensex dropped 501.51 points (−0.61%) to close at 81,757.73, while the Nifty 50 ended the day 143.05 points lower (−0.57%) at 24,968.40, slipping beneath the psychologically significant 25,000 mark for the first time in several sessions.
The selling was broad-based, with real estate, IT, and banking names leading the decline. High valuations, profit booking, and lingering concerns about monsoon impact on rural demand contributed to investor nervousness.
Technical Outlook: Bears Take the Wheel
According to analysts, the Nifty 50 has now formed three consecutive bearish candles on the weekly chart. That’s a clear indication that upward momentum—so dominant in the past month—has begun to fizzle.
“The charts are sending warning signs,” said Amol Bharde, senior technical strategist at a Mumbai-based brokerage. “The Nifty’s failure to hold above 25,100 triggered weakness, and the inability to defend 25,000 confirms short-term selling pressure.”
For the Sensex, the story is similar. It’s showing lower top formations on daily and intraday charts. On the weekly timeframe, a bearish candle pattern suggests further downside risks unless sentiment reverses sharply.
“Short-term market texture is weak. A fresh sell-off could emerge if Sensex breaches 81,600 convincingly. Below this, we’re looking at 80,700 to 80,400 as the next major support zones,” Bharde added.
On the upside, the 50-day SMA—currently at around 82,100 to 82,300—may act as immediate resistance, especially for short-term traders looking to capitalize on intraday bounces.
Key Resistance and Support Levels
| Index | Support Levels | Resistance Levels |
|---|---|---|
| Sensex | 80,400 – 80,700 | 82,100 – 82,300 |
| Nifty 50 | 24,800 – 24,900 | 25,200 – 25,350 |
| Bank Nifty | 54,200 – 54,400 | 55,300 – 55,800 |
Bank Nifty: Lacking Firepower
The Bank Nifty, often a reliable driver of broader market rallies, has not provided the lift bulls were hoping for. The index closed the week near 54,700, down significantly from its recent highs, as concerns about credit growth moderation and rising cost of funds continue to weigh on sentiment.
Traders are watching the 54,200 to 54,400 band closely. If that support fails, analysts warn of a quick dip toward 53,700. On the higher side, 55,300 to 55,800 remains a key resistance zone, which the index has failed to breach in the past few sessions.
What Could Move Markets This Week
While Monday may start off quietly, the rest of the week is stacked with cues that could rattle—or revive—the market.
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Corporate earnings: HDFC Bank and Reliance Industries are expected to report this week. Both carry significant weight in the indices.
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Global cues: U.S. tech earnings (notably Alphabet and Meta) and Fed Chair Powell’s commentary could influence foreign investor flows.
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Monsoon watch: With the agriculture sector in focus, any hint of below-normal rainfall in key crop belts may dampen FMCG and rural sector stocks.
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Macro indicators: India’s fiscal deficit and inflation readings for June are due later this week.
Market Watchlist for July 21
Here are some stocks and sectors that may see action in today’s session:
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HDFC Bank: Ahead of its earnings report, the stock may witness speculative interest.
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Reliance Industries: Energy and telecom updates remain in focus.
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IT Sector: With Nasdaq futures under pressure, Indian IT majors may mirror global weakness.
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FMCG Stocks: A pick-up in monsoon rains could offer some upside to rural-facing names.
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Midcaps & Smallcaps: Volatility expected to rise, especially in companies with stretched valuations.
Expert Take: Caution, Not Panic
Despite the bearish tilt in charts, most analysts aren’t predicting a freefall.
“It’s not a crash setup. It’s a classic case of profit-taking at elevated levels after a strong rally,” said Meenakshi Gulati, equity strategist at Axis Securities. “We’re still in a buy-on-dips market as long as Nifty holds 24,800 and Bank Nifty stays above 54,000.”
Foreign portfolio investors (FPIs) have turned net sellers in the past three sessions, but domestic institutions have largely absorbed the selling, maintaining some semblance of balance.
