Nifty crucial support placed at 10,420; buy Ashok Leyland for the short term

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26 Aug, 2025 12:21

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Jaydeb Dey

The Nifty ended the previous session 0.75 percent lower at 10,516.70. It fell from its day's high of 10,621.70 and ended closer to the 10,500 mark. For the second consecutive session, it ended below its 30-day EMA on the daily charts, placed at around 10,610.

A close below 10,560 with a bearish candle on the charts suggests the index may continue facing resistance around 10,560 and 10,630. So, the benchmark index is likely to test 10,500 once again. If it falls below 10,500, there is an increased possibility of it moving further down towards 10,420.

On the hourly chart, the Nifty continues trading below its 200-day EMA placed at around 10,620. However, the relative strength index has already reached the oversold zone, which may cause an intraday pullback towards 10,560 and 10,630.

Currently, the index is trading below both the critical levels placed at 10,630 and 10,560, which is why weakness is likely to persist. Downside supports are placed are placed at around 10,500 and 10,420.

The Bank Nifty ended the previous session 0.48 percent lower at 25,750.80. It ended below its critical support placed at around 25,800. Immediate pivotal support is placed at around 25,700, while a pullback is likely to find resistance at around 25,800 and 26,100.

Based on a thorough technical study, the research firm recommends Ashok Leyland, which can return up to 7 percent in the short term:

Ashok Leyland | Rating: Buy | Target: Rs 140 | Stop loss: Rs 125 | Return: 7 percent

The stock declined sharply from its recent all-time high around Rs 166 levels and currently approaching towards 200 EMA on daily chart placed around Rs 130 levels. The stock looks oversold on daily chart.

Based on above mentioned observations, the firm recommends Ashok Leyland as a buy on dips for the short term upside target of Rs 140.

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.