Market wrap up(DWM,T,N,E):The selling pressure mounted for the second straight session, dragging the Nifty 50 below the 100-day EMA (24,630) with a nearly 1 percent loss on the monthly derivative contracts expiry on August 28. The sentiment turned more bearish with continued weakness in momentum indicators. Hence, if the correction widens further, 24,400 (upward-sloping trendline support) and 24,340 (August low) are the levels to watch. However, in case the index rebounds, the 100-day EMA, and 24,700 level (which coincides with the midline of the Bollinger Bands and Thursday’s high) could act as possible resistances, according to experts. The Nifty 50 formed another long bearish candle on the daily timeframe, with a continuing lower highs–lower lows structure and above-average volumes, signaling a negative trend. With Thursday’s fall, the index is now trading below the 20-, 50-, and 100-day EMAs, while the RSI at 40.79 has triggered a bearish crossover, indicating weakening momentum. Additionally, the MACD is on the verge of a negative crossover, and positive momentum in the histogram has faded further. This indicates a strong bearish setup in the short term, increasing the likelihood of further downside unless a sharp reversal occurs. The Bank Nifty continued to underperform compared to the benchmark Nifty 50, falling 1.16 percent and forming a long bearish candle on the daily timeframe, again with above-average volumes. The index is now trading below the lower line of the Bollinger Bands, and is approximately 250 points away from its 200-day EMA, and 400 points away from the 50% Fibonacci retracement level (from the April low to the July high). Furthermore, the 10-, 20-, and 50-day EMAs are trending downward. The RSI at 28.58 has now entered the oversold zone, while the MACD retains its bearish crossover, and the histogram continues to weaken. This indicates continued bearish momentum, and unless a reversal is triggered, further downside could follow.
