Market is largely negative

Mumbai, Aug 01

In the last week, the benchmark indices continued to face selling pressure at higher levels. The Sensex was down over 1300 points.

Among sectors, the FMCG Index outperformed, rallying over 2.95 per cent, whereas the Reality and Defence indices declined the most. Reality shed 5.70 percent, and Defence was down by 4.65 per cent.

During the week, the market consistently faced selling pressure at higher levels. Technically, on daily charts, the market is holding a lower top formation, and on weekly charts, it has formed a bearish candle. Additionally, the market is comfortably trading below the 50-day and 20-day Simple Moving Averages (SMA), which is largely negative.

“We believe that the short-term market outlook is weakening; however, a fresh selloff is possible only if the 80,400 level is broken below,” says Amol Athawale of Kotak Securities.

If that happens, the market could slip to around 80,000. Further downside may continue, potentially dragging the index down to 79,700-79,500. On the upside, a move above 81,300 could change sentiment. Above this level, the market could retest the 50-day SMA or reach the 82,000-82,300 zone.

For Bank Nifty, as long as it remains below 56,100, a weak formation is likely to persist. A decline below this level could see it slipping to 55,000–54,700. On the higher side, if it crosses above 56,100, it could bounce back toward the 50-day SMA or reach 56,500, with potential resistance at the 20-day SMA around 56,700.

Stock Picks

Inox Wind (INOXWIND)

Buy | CMP: ₹151.76 | SL: ₹140 | Target: ₹178

Inox Wind is showing strong buying momentum after bouncing back from support near ₹140. The stock is trading above its key short-term averages with rising volumes, indicating continued strength. The RSI is trending upward, confirming positive sentiment. If it sustains above ₹151.76, it may move toward ₹178 in the short term. The formation of higher lows supports a bullish outlook. Traders can consider fresh positions while keeping a strict stop-loss at ₹140 to limit risk.

Jyothy Labs (JYOTHYLAB)

Buy | CMP: ₹332.35 | SL: ₹315 | Target: ₹380

Jyothy Labs is witnessing steady demand, backed by improved volumes and healthy price action. The stock is holding above its short-term moving averages, which signals a positive setup. RSI is pointing higher, suggesting more room for upside. A close above ₹332.35 could drive the stock toward ₹380 soon. With higher lows forming on the chart, the trend remains supportive. Traders may look to buy at current levels while using ₹315 as a protective stop-loss.

(Source_Riyank Arora Technical Analyst at Mehta Equities)

EoM.