Chartist Warns of Nifty Sell-Off Below 23,250, Sees Cooling Metal Rally and Bullish Outlook for 2 Key Pharma Stocks

Market Outlook: Nifty 50 Breaks Down, SBI Securities Sees Support at 23,250

The Nifty 50 index broke down decisively from its tight consolidation range in the past week, slipping to a low of 23,262 before attempting a modest recovery from lower levels. Despite this pullback, the index closed the week with a loss of over 2 percent, forming a bearish candle with a noticeable lower wick on the weekly chart.

The decline was largely driven by weakness in heavyweight sectors, particularly Nifty IT and Bank Nifty. The broader market also took a breather following the strong rally seen in recent weeks, with the Nifty Smallcap 100 index correcting by more than 4 percent and forming a sizeable bearish candle on the weekly timeframe.

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The Nifty 50 index continues to trade below its key moving averages, suggesting that the near-term trend remains under pressure. However, momentum indicators present a slightly nuanced view. The daily RSI found support around the 40 mark and has since rebounded, currently moving within the 40–60 band. This implies that the market may continue to move within a range over the next few sessions.

Key Levels to Watch

• Immediate support: 23,300–23,250
• Sustained breach below 23,250 could accelerate the downside, dragging the index towards 23,000 and then 22,800 in the short term
• Strong resistance: 23,850–23,900 (20-day EMA)

Top Picks for Next Week

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SBI Securities' Head - Technical and Derivatives Research, Sudeep Shah, recommends two stocks for the coming week: Shilpa Medicare and Zydus Lifesciences.

• Shilpa Medicare: The stock has displayed a strong bullish setup after breaking out of a prolonged consolidation range. Momentum indicators remain firmly supportive, with the RSI sustaining above the 60 mark on both daily and weekly charts. Accumulate stock in the zone of Rs 475-480 with a stop-loss of Rs 465.
• Zydus Lifesciences: The stock has entered a strong bullish phase after delivering a decisive downward sloping trendline breakout on the weekly chart. Momentum indicators remain firmly supportive, with the RSI steadily climbing and sustaining above the 60 mark on the weekly timeframe. Accumulate stock in the zone of Rs 1,008-1,015 with a stop-loss of Rs 980.

Nifty Metal Index

The Nifty Metal index has been a standout performer over the past couple of weeks, significantly outperforming the broader frontline indices and witnessing a sharp upward rally. However, signs of exhaustion are now beginning to emerge at higher levels. A bearish engulfing pattern formed on Friday suggests that sellers are beginning to regain control after the recent rally. Considering these technical factors, it appears that the Nifty Metal index may witness some loss of momentum or enter a consolidation phase in the coming week.

Bharti Airtel

Bharti Airtel has witnessed a decisive breakout above a downward-sloping trendline on the daily chart, signalling a potential reversal in the prevailing trend. The breakout is accompanied by a sharp rise in trading volumes, indicating strong buying interest at higher levels. Momentum indicators remain favourable, with the RSI trending higher and reflecting improving strength. As long as the stock sustains above the Rs 1,870–1,865 zone, the upward momentum is likely to continue in the near term.