NIFTY Index Chart Analysis

The market mood has changed sharply over the last couple of trading sessions. What began as a routine profit-booking phase has now turned into a broader risk-off move, weighed down by a cluster of macro concerns. Prime Minister Narendra Modi’s appeal to conserve fuel, return to work-from-home practices where possible, limit non-essential foreign travel and reduce import-heavy consumption such as gold purchases has reminded investors that external pressure on India’s economy is rising.[EasyDNNnews:PaidContentStart]

The pressure points are visible across the macro dashboard. Moody’s has cut India’s 2026 GDP growth forecast to 6 per cent, citing softer private consumption, slower capital formation, weaker industrial activity and higher energy costs. At the same time, April CPI inflation rose to 3.48 per cent from 3.40 per cent in March, with food inflation at 4.20 per cent. Foreign investor outflows have continued, the rupee has touched a record low against the US dollar, and there is still no durable resolution in the US-Iran conflict, keeping crude oil and currency risks elevated.

Against this backdrop, the Nifty 50 opened with a gap down on Tuesday and remained under selling pressure throughout the session. The index posted its sharpest single-day fall since March 30, 2026, and closed below the April 13 low. At close, Nifty slipped below the 23,400 mark to end at 23,379.55, down 436.30 points or 1.83 per cent.

With this decline, the index extended its losing streak for the fourth consecutive session. From the May 7 high of 24,482, Nifty has now corrected by more than 1,000 points, signalling a sharp deterioration in short-term sentiment.

The weakness was broad based. Only three Nifty 50 stocks managed to close in the green, while 47 ended lower. The broader market faced deeper cuts, with the Nifty Midcap index falling 2.54 per cent and the Nifty Smallcap index slipping 3.17 per cent. The internal structure has also weakened sharply. Over 60 per cent of the Nifty 500 stocks are now trading below their 20 DMA, compared with just 5 per cent on April 21, 2026.

The daily chart formed a large bearish candle with a lower high and lower low. More importantly, the index broke below its recent consolidation range. Since April 23, 2026, Nifty had largely moved between 24,500 and 23,800. Tuesday’s decline marked a clear breakdown from this zone and pushed the index into the gap area created on April 8, 2026.

Nifty also recorded its second consecutive distribution day as the fall came with higher volumes. The index is now trading 2.23 per cent below its 50 DMA. Bollinger Bands have started expanding after a tight contraction, and Nifty has moved outside the lower band. The index has also closed below the 50 per cent retracement level of the previous upswing.

Going ahead, the key support zone is placed around 23,123 to 23,154. This range is important as it marks the confluence of the measured move target of the range breakdown, the 61.8 per cent Fibonacci retracement of the current upswing and the lower end of the April 8 gap area.

On the upside, 23,500 is likely to act as immediate resistance. A sustained move above this level may open the door for a retest of 23,800. Momentum indicators remain weak, with the MACD line below the zero line and the 14-period RSI near 40.

For now, 23,123 to 23,154 remains the key area to track. As long as this support holds, a technical pullback cannot be ruled out. However, a decisive break below this range may extend the fall towards 22,540 to 22,470.

STOCK RECOMMENDATIONS
AJANTA PHARMA LTD. ............................. BUY .................... CMP ₹3,090.95
BSE Code : 532331
Target 1 .... ₹3,300 
Target 2 ..... ₹3,400 
Stoploss....₹2,930 (CLS)

Ajanta Pharma is a specialty pharmaceutical formulations company with a strong focus on the branded generics business across India, Asia and Africa. The company has an on ground presence in more than 30 countries, with several products being first to market and leaders in their respective sub therapeutic segments. It also operates in the US generics market and the institutional business in Africa. Ajanta has a state of the art R&D centre in Mumbai and seven manufacturing facilities in India. On the technical front, Ajanta Pharma closed near the pivot of a nine week cup like pattern and recorded its highest weekly close in nearly 80 weeks. While a confirmed breakout is still awaited, the recent rise in volumes suggests fresh buying interest. The stock continues to display relative strength, with its RS line moving to a new high, indicating outperformance against the broader market. All key moving averages are trending upward, while expanding Bollinger Bands across time frames point to improving momentum. The moving average ribbon also remains firmly positive. Among indicators, the weekly MACD has given a fresh bullish signal. The 14 period daily RSI is placed in the bullish zone, while KST and Stochastic RSI continue to support the positive structure. The Elder Impulse system has also formed a strong bullish bar. Overall, Ajanta Pharma appears close to a breakout. Going ahead, the stock needs to sustain above the ₹3,116 to ₹3,125 zone. If the breakout holds, it may move towards ₹3,300 to ₹3,400 in the near term. A stop loss may be placed at ₹2,930.

BHARAT FORGE LIMITED ......................... BUY .................... CMP ₹1,912.75
BSE Code : 500493
Target 1 ...... ₹2,150 
Target 2 ..... ₹2,220 
Stoploss.....₹1,745 (CLS)

Bharat Forge Limited, a Pune based Indian multinational company, is a technology driven global player in high performance and safety critical components. The company serves multiple sectors, including automotive, power, oil and gas, Construction and mining, rail, marine, Defence and Aerospace. The stock recently broke out of a nine week cup pattern with strong volumes. On the daily chart, it also moved out of a cup and handle like formation and has now retested the breakout zone. A strong earnings performance added to the buying interest. Its Relative Strength line has moved to a new high, while the stock recently touched a fresh lifetime high. However, due to the broader market correction, the price has pulled back from higher levels. Despite this retreat, the stock continues to trade desired sequence and are trending upward, which keeps the overall structure positive. On the weekly chart, the MACD has rebounded after taking support near its nine period average, reinforcing the positive bias. The 14 period weekly RSI has also moved into the bullish zone. Overall, Bharat Forge has already broken out of a bullish pattern. The recent market led correction has brought the stock back towards the breakout area, offering a favourable entry opportunity. The stock can be bought with a stop loss of ₹1,745 for a medium term target of ₹2,150 to ₹2,220.

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