Traders need to be cautious, next support for Nifty at 50-DMA; 4 stocks to buy

Reflection of Bombay Stock Exchange building (R) is seen on a car in Mumbai February 6, 2006. Traders jumped to their feet, screamed in joy and burst firecrackers as India's benchmark stock index topped 10,000 points for the first time on Monday. The 30-share BSE index rose as much as 2.7 percent to a record 10,002.83, beating the previous record of 9,993.92 points set on February 1, 2006, before closing at 9,980.42. REUTERS/Adeel Halim. - RTR15X1T

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26 Aug, 2025 12:21

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Weighed down by weak global cues, coupled with profit booking at home, Nifty closed lower continuing the downtrend seen in the past four trading sessions on Wednesday.

The Nifty is likely to find its next support around its 50-DMA placed at 8,970 and next support could be seen at 50-DMA at 8,800.

The daily candlestick chart pattern shows it was a gap down opening and further sell off at a higher level shows that market is turning into a sell on rally market from a buy on dip one.

Trend following indicators such as MACD is diving below its signal line which shows prevailing weakness and a divergence is yet to occur.

Bulls need to be cautious from here and a trend reversal will only happen if there is formation a bullish candle on Thursday.

Top four stocks to buy which are looking attractive based on technical parameters.

HCL Technologies formed a bullish engulfing candle pattern on the daily chart on Wednesday. This trend suggests that the bulls have taken control of a security's price and more buyers spill over into the next candle.

Chart pattern shows that the 20-days moving average (DMA) is working as immediate support for the stock which is maintained on Wednesday too. MACD is still trading above its signal line with no sign of divergence.

The stock came off the day lows and formed a near dragonfly doji kind of pattern on Wednesday closing. The stock saw a rise in volume and most of it was a delivery based buying which is nearly 90 percent.

Container Corporation was back into the lime light with GST council notifying that the draft bill. High delivery volume suggests large buying interest. The RSI on the daily chart stands at 51 and it is neutral.

The stock is on a short term bull market which has come a long way to Rs 109 from Rs 85. Chart structure shows that the stock showed signs of consolidation at higher levels.

Consolidation at a higher level is an early indication of a new trend which is set to unfold. The 20-DMA of 101 will act as support zone one and the aggressive investor can go long on Dish TV.

Tata Global Beverages closed near its 20-DMA of Rs 142 at a time when benchmark indices witnessed their worst day of the year 2017. Chart pattern shows that it swung on subsequent days after a sell-off. It will likely to pull back and support could be at

its 50DMA of 137.