NIFTY Index Chart Analysis

After a prolonged period of uncertainty regarding tariffs imposed on India, clarity has finally emerged. US President Donald Trump announced a substantial 25 per cent tariff, along with additional penalties specifically targeting India's crude oil and defence transactions with Russia. However, the narrative doesn't end here—President Trump has also signaled a possibility of "very substantially" increasing tariffs on Indian imports, citing India's procurement of Russian oil.[EasyDNNnews:PaidContentStart]

India had earlier responded firmly, calling such targeting unjustified and unreasonable. Like any major economy, India affirmed its readiness to take all necessary measures to safeguard national interests and economic security. Consequently, this ongoing exchange has dampened market enthusiasm, prompting investors to engage in profit booking.

Reflecting this sentiment, the Nifty has extended losses for the fifth consecutive week, concluding July with a decline of 2.90 per cent—marking its worst July performance since 2019. Furthermore, August has commenced on a shaky footing. The index currently appears to be experiencing a minor corrective phase after enjoying a sustained rally, having now corrected roughly 4 per cent from the highs recorded in June.

Technically, Nifty has breached a short-term rising trendline support on the weekly timeframe and is retesting the critical support level of 24,500 on the daily chart. Over the past few weeks, attempts at recovery have consistently faltered, encountering strong resistance within the 25,230-25,250 zone on multiple occasions. Now, the Nifty is approaching its consolidation support area located between 24,500 and 24,440. Should this zone fail to hold, the next immediate support lies at 24,379, coinciding with the low of the upside gap candle from May 12. Maintaining this support zone is crucial to avoiding a significant correction; conversely, any rebound from this area would likely encounter resistance again around 25,040-25,255.

Analyzing the weekly chart pattern reveals a breakdown below the shortterm ascending trendline support, suggesting the potential onset of consolidation or a minor retracement phase. Nevertheless, the broader uptrend remains intact as the index still trades above its 50-week moving average, currently positioned at 24,212, despite the short-term outlook shifting to sidewaysto-negative.

Momentum indicators are also signaling caution. While the weekly RSI remains neutral, the daily RSI has slipped below the 40 mark. The daily MACD indicator is firmly below the zero line, and the weekly MACD has issued a fresh sell signal. Additionally, Bollinger bands are trending downwards, and the 50-day moving average has flattened.

Considering the prevailing technical setup, markets are expected to remain range-bound and susceptible to profit-taking in the absence of a strong directional catalyst. Traders are recommended to avoid aggressive positions and instead focus on a selective, stock-specific strategy while securing profits from existing trades. Adopting a cautious approach with stringent stop-losses is advisable as markets navigate this corrective phase. Hence, a stance of guarded optimism and selective participation would be prudent in the coming week.

STOCK RECOMMENDATIONS
INDIA NIPPON ELECTRICALS LTD. ...................... BUY .............. CMP ₹808.60
BSE Code : 532240
Target 1 .... ₹925 
Target 2 ..... ₹940 
Stoploss....₹749 (CLS)

India Nippon Electricals Limited (INEL) was incorporated in 1984 and is owned by Lucas Indian Service Limited, a wholly owned subsidiary of Lucas-TVS Limited. The company was established to manufacture electronic ignition systems for two-wheelers, threewheelers, and portable engines. INEL’s product offerings include a comprehensive range of custom-built ignition system parts for various applications, catering to a wide array of OEMs in the vehicle industry. It enjoys a market leadership position in electronic ignition system products and has recently ventured into the electric vehicle segment.

From a technical standpoint, the stock is comfortably placed above its key moving averages—trading around 7 per cent and 19 per cent above its 50-DMA and 200-DMA, respectively. It is currently hovering near the pivot point of a 52-week long base formed on its weekly chart. The stock meets most of the CANSLIM characteristics. It has an EPS Rank of 84, which is a Good score indicating consistency in earnings; an RS Rating of 84, also Good, suggesting outperformance compared to other stocks; Buyer Demand at A+, evident from recent interest in the stock; a Group Rank of 31, placing it in a strong industry group of Auto/Truck-Original Equipment; and a Master Score of B, which is close to the best. Institutional holdings have remained stable in the last reported quarter. The daily 14-period RSI is in the bullish zone, and the daily MACD has generated a bullish crossover, validating the positive bias. Recommendation: BUY with a stop loss at ₹749 and a target price of ₹925–₹940.

SBI LIFE INSURANCE COMPANY LTD ................ BUY ............. CMP ₹1,856.95
BSE Code : 540719
Target 1 ...... ₹2,000
Target 2 ..... ₹2,070 
Stoploss.....₹1,750 (CLS)

SBI Life Insurance was established as a joint venture between SBI and BNP Paribas Cardif, commencing operations in 2001. The company is uniquely positioned to tap into the vast potential of the Indian life insurance sector by leveraging the extensive branch network of the SBI Group. Over the years, SBI Life has expanded its coverage to around 27,500 branches.

Technically, the stock has broken out of a one-month long consolidation phase with average volume and a decentsized bullish candle. It is trading above all its short- and long-term moving averages. Moreover, there is a desired sequence in the trend of these averages, all of which are moving upward. The stock meets most of the CANSLIM parameters. It has an EPS Rank of 70, which is FAIR; an RS Rating of 75, also FAIR, indicating strong recent price performance; Buyer Demand at B+, evident from the rising demand; a Group Rank of 24, placing it in a strong Insurance–Life industry group; and a Master Score of B, which is close to the best. Institutional holding has increased in the last reported quarter, which is a positive sign. BUY with a stop loss at ₹1,750 and a target price of ₹2,000–₹2,070.

*LEGEND:  ◼ EMA - Exponential Moving Average.  ◼ MACD - Moving Average Convergence Divergence  ◼ RMI - Relative Momentum Index  ◼  ROC - Rate of Change  ◼ RSI - Relative Strength Index
(Closing price as of August 05, 2025)

Disclaimer : Above recommendations are based on various technical parameters and any fundamental input has not been considered for the recommendations. Follow strict stop loss for the recommendation.

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