Sensex Outlook Today: Oversold Signals Emerge, but Bears Still in Control
Following the sight of a heavy sell-off on Monday that shook Dalal Street, Indian markets are trying to settle down as we approach Tuesday’s session. Initial indications from GIFT Nifty are suggesting a moderate recovery with a 1.49% rise, trading at 22,649—up by 328 points. It is a welcome relief following Monday’s bloodbath that erased huge investor wealth and shook market sentiment across the board.
Sensex : Todays Analaysis:
Today’s early signs are mixed but mildly positive. Technical charts remain weak, but oversold levels can prompt some short-term buying. Sensex’s RSI stands at 34.08, moving into the oversold territory, while MACD still reflects bearish momentum. This indicates that although sentiment remains weak, we could witness some bargain buying or short covering at lower levels.
Let’s go back to what transpired yesterday. The Sensex had closed 2.95% lower at 73,141.96 after dipping as much as 2,222 points during intraday trade. In fact, at around 3:15 PM, it was observed oscillating around 73,054—down by almost 2,309 points, which is one of the most volatile and aggressive sessions ever. Nifty wasn’t left behind either, closing down over 740 points at 22,162, falling more than 1,700 points from its March 25th high of 23,870.
Sensex : High Sell-off seen yesterday :
The meltdown was principally precipitated by global panic. The US markets experienced their own rollercoaster ride. The Dow Jones declined 349 points or 0.9%, after having fallen over 1,700 points at the day’s low. It later recovered, recording a record intraday swing of 2,595 points. The S&P 500 declined 0.2% after touching bear market levels briefly, and the Nasdaq only managed to remain in the green with a gain of 0.1% on the back of selective buying in mega-cap tech stocks such as Nvidia and Palantir.
Back home, there was major selling in all the major segments. Realty and Metals suffered the maximum with the losses of 5.7% and 6.75% respectively. The surge in India VIX to 22.79—an increase of nearly 65% in one single day—was the fuel added to the fire, the highest volatility reading after June 2024. Such a steep upsurge in fear gauge portrayed the nervousness of the traders with both worldwide and domestic uncertainty.
Sensex Support and Resistance:
Chart : Tradingview
Derivatives data also support the bearish tone. The highest Call open interest is set at 76,000 on Sensex, which serves as a strong resistance, and the highest Put OI at about 75,000 is in near-term support. The current resistance level for Sensex is indicated at 73,700–74,000, while support is seen at closer to 72,200–72,500 levels.
Fii Dii data Suggests bearish sentiments:
Foreign Institutional Investors (FIIs) were once again net sellers in the cash segment, selling shares worth ₹9,040 crore. Conversely, Domestic Institutional Investors (DIIs) came to the rescue, purchasing equities of ₹12,122 crore. In index futures, FIIs shed positions to the tune of ₹3,335 crore, whereas they remained net buyers in index options with ₹14,633 crore inflows. The FIIs’ long-short ratio in index futures dropped to 25.14 from 29.01—reflecting high bias towards bearish positions.
Sensex Technical Analysis
Technically, the image is still not promising. The index still trades below its short-term moving averages, and RSI being close to oversold levels indicates weakness, although a short-term recovery is likely. MACD is still bearish, and with heavy call writing at higher strikes, the direction of least resistance is still lower.
But oversold levels coupled with a modestly positive GIFT Nifty and potential global relief rally may provide some support today. But still, it’s not a trend change. Any bounce will be accompanied by selling pressure unless key resistance levels are broken convincingly.
what do traders and investors do today?
Caution remains the watchword. Markets are in an extremely volatile stage where intraday ranges are unruly, and direction can change within minutes. Intraday traders need to maintain tight stop-loss points. Investors, particularly those with a long-term perspective, can begin examining good quality stocks for staggered accumulation but only in minute amounts.
Today’s session may start on a positive note, but the larger trend is still bearish unless we witness uniform buying across the board. Watch closely for volatility, FII flows, and global cues since they will still be driving sentiment in the short term.
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