Nifty may retest downside support of 10,740; buy Aurobindo Pharma for the near term

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26 Aug, 2025 12:21

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Jaydeb Dey

The Nifty ended Friday 0.09 percent higher at 10,817.70. It opened on a flat note, hit a high 10,834 and a low 10,756. It recovered towards the close of trade, which led to the formation of a Spinning Top candle. This candle pattern implies that nervousness is likely to persist in the first half of the week.

On the weekly chart, the Nifty ended 0.46 percent higher. It touched a high of 10,893 and ended off its weekly high before finishing off with an inverted Hammer candle. This implies that selling pressure is on a rise around its critical resistance. Hence, staying cautious on a rise is advised.

10,850 and 10,880 will continue to act as major resistances. Candle patterns along with position of leading indicators suggests the Nifty may again retest its downside critical supports placed around 10,740, 10,700 and 10,670 levels. However, the broader pattern suggests the primary uptrend is still well intact and a retracement towards critical supports is likely to be bought in for the next leg of upmove.

On the Nifty hourly chart, despite a sharp recovery in the last hour of trade on Friday it still looks weak. Hence, staying cautious on a rise around 10,850 is advised. Downside supports are placed around 10,740 and 10,700 levels.

Nifty patterns on multiple timeframes show it ended the week with an inverted Hammer candle, which implies nervousness still persists.

The Bank Nifty on Friday ended 0.55 percent lower at 26,417.40. It ended the session with a bearish body candle. The index is likely to retest its downside support around 26,200, while upside resistance is placed around 26,700.

Based on a thorough technical study, the research firm recommends Aurobindo Pharma for the short term:

Aurobindo Pharma | Rating: Buy | Target: Rs 635, stop loss: Rs 590, Return: 4%

The stock ended the previous week with a huge bullish body candle above the pivotal resistance placed around Rs 605. Downward trend line breakout around Rs 600 makes the bull case even stronger.

Based on the above mentioned observations, the firm recommends Aurobindo Pharma as a buy on dips for the short term upside target of Rs 635.

Disclaimer: The author is Technical Analyst at Stewart & Mackertich Wealth Management Ltd. The views and ideas expressed above may have been suggested to the clients of Stewart & Mackertich Wealth Management Ltd. It is advised that investors/traders should consult with their Certified Experts before taking any investment decision.