Is Dalal Street at the Bottom? Key Nifty 50, Sensex Levels to Watch as Market Struggles
Dalal Street : The Indian stock market continued its downward movement on Tuesday, February 18, 2025, despite a slight recovery in the latter part of the session. Following a mild breather on Monday, the market sentiment remained subdued due to a variety of factors, including weak corporate earnings, continuous foreign outflows, and ongoing global trade uncertainties. However, the market saw some signs of resilience as both the Nifty 50 and Sensex indices displayed signs of recovery from their key support levels.
Nifty 50 and Sensex: A Mixed Day for the Markets
The Nifty 50 index closed at 22,945 points, down by 0.06% from the previous day’s close. Despite a recovery of 137 points during the day, the index ultimately ended in the red. On the other hand, the Sensex, which had been struggling in the morning session, saw a recovery of 491 points from its intraday low and ended with a modest gain of 0.04%, closing at 75,967 points.
The market’s performance on Tuesday highlights the ongoing uncertainty in the market as investors grapple with several challenges. Amid weak earnings reports from some sectors, foreign investors continued their outflows, exacerbating the negative sentiment. Moreover, global trade tensions and inflationary concerns in major economies weighed heavily on investor sentiment.
The Technical Perspective: Nifty Shows Signs of Resilience
Despite the downward pressure, there were some positive signals in the market. According to Hrishikesh Yedve, AVP of Technical and Derivatives Research at Asit C. Mehta Investment Intermediates Ltd., the Nifty 50 has formed a hammer candlestick pattern on the daily chart near a crucial support zone. This technical formation suggests potential strength and may indicate that the market is nearing a bottom.
The Nifty 50 index is currently facing immediate resistance at 23,240, the 21-Day Simple Moving Average (SMA). If the index can break above this level, it could signal a near-term reversal in the market. Yedve suggests that as long as the Nifty holds above the recent low of 22,725, a buy-on-dips strategy remains favorable.
Key Levels to Watch on Nifty 50 and Sensex
Market analysts are closely watching specific levels on both the Nifty 50 and Sensex to gauge whether the market has truly bottomed out. Mahesh M Ojha, AVP — Research at Hensex Securities, points out that the bulls are accumulating at lower levels, and both the Nifty 50 and Sensex are showing signs of recovery from crucial support zones. The Nifty 50 has found support between 22,750 and 22,800, while the Sensex has found support in the range of 74,800.
Ojha adds that the key resistance levels for the Sensex lie between 76,550 and 76,600, which corresponds to the Nifty’s resistance at 23,050. A decisive break above these levels could indicate a shift in sentiment, but it would not necessarily confirm that the market has reached its bottom. A sustained breakout above 77,400 for the Sensex and 23,800 for the Nifty would be necessary to establish a more robust upward trend.
Looking Ahead: Potential for a Relief Rally
Sumeet Bagadia, Executive Director at Choice Broking, also sees potential for a rally if the Nifty 50 holds its support around the 22,800 mark. Bagadia believes that a sustained move above 23,300 would likely bring the Nifty 50 closer to 23,800 or even 24,800 in the near term. However, he also emphasizes the importance of stock-specific strategies in the current environment, as market triggers are expected to remain volatile.
The outlook for Dalal Street will largely depend on how the market reacts to global and domestic cues in the coming weeks. If corporate earnings improve and foreign flows turn positive, the market could see a more decisive recovery. However, until these factors align, investors should be cautious and consider a selective approach to stock picking.
Financial Ratios to Watch
Here are some of the key financial ratios and levels to keep an eye on for Nifty 50 and Sensex:
| Indicator | Nifty 50 Level | Sensex Level |
|---|---|---|
| Support Level 1 | 22,750 | 74,800 |
| Support Level 2 | 22,800 | 75,000 |
| Resistance Level 1 | 23,050 | 76,550 |
| Resistance Level 2 | 23,240 | 76,600 |
| Key Reversal Point | 23,300 | 77,400 |
| Critical Breakout Level | 23,800 | 77,500 |
| Potential Target (Near Term) | 24,800-25,000 | 78,000-79,000 |
Conclusion
While the Indian stock market continues to face challenges, there are signs that the Nifty 50 and Sensex may be nearing a bottom. Traders and investors should closely monitor the critical levels outlined above for signs of a reversal or further decline. Until then, a cautious and selective approach seems to be the most prudent strategy for navigating the current market conditions.
By keeping an eye on the technical indicators and staying informed about global and domestic developments, investors can better position themselves for potential opportunities in the coming weeks.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.