Nifty likely to consolidate around 10,420; BPCL a good buy for short term

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26 Aug, 2025 12:21

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The Nifty yesterday ended 0.22 percent up at 10,402.25. The index continues facing resistance around 10,420 as discussed in our previous post, day’s high was 10,424.85. Positive opening failed to sustain above 10,420, 38.2 percent  Fibonacci retracement level of the entire correction from Nifty all time high to its recent low around 9950 levels, despite positive European markets cues might be an early indication of a short-term correction within current uptrend.

Also, traders and investors may find attractive opportunities in terms of risk-reward ratio on dips. Downside supports are placed around 10,370 and 10,320. On the flipside, successful breaking out immediate resistance placed around 10,420 brightens the possibility of next leg of up-move towards 10,470. However, Nifty getting into a consolidation in the price band of 10,420 to 10,320 before up-move towards 10,470 is likely.

On the Nifty hourly chart; flattening RSI while Nifty facing resistance around 10,420 is intact. Hence, intermediate correction is likely. However, considering the broader chart pattern we still prefer Buy-on-dips around critical supports. Downside critical support is placed around 10,320.

Nifty patterns on multiple time frames show; it filed to breakout 38.2 percent Fibonacci retracement level, placed around 10,420, of the entire correction from the all-time high to its recent low around 9950. Hence, the possibility of a correction towards 10,320 is still alive. We still recommend buy-on-dips strategy as long as critical supports are intact.

The Bank Nifty previous session ended 0.53 percent up at 25,226.80. It closed above 25,150 towards ending the day with a bullish body candle. However, 25,250 is the pivotal resistance and has to be taken out decisively towards unfolding next leg of up-move towards 25,450.

Based on thorough technical study, the research firm has recommended BPCL which can give up to 5% return in the near short term:

For the second consecutive session the stock ended above the downward trend line breakout. Finishing off the session above the 30 daily EMA placed around Rs 440 levels coupled with rising RSI while +DI –DI bullish crossover is seen makes the bull case even stronger.

Based on the above mentioned observations, the house has recommended BPCL as a buy on dips for the short-term upside target of Rs 465.

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.