Stay cautious as Nifty may retest 10,700 levels

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26 Aug, 2025 12:21

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Jaydeb Dey

The Nifty ended Tuesday 0.83 percent lower at 10,710.45. It opened with a minor gap down and continued making lows before ending the session with a bearish body candle. The index found support around its 30-day exponential moving average (EMA) on the daily chart placed around 10,700 levels and ended nearer to the day’s low.

The candle pattern, along with position of leading indicators, suggests it may once again challenge its critical support of 10,700. Successful breakdown of 10,700 may unfold next leg of down move towards 10,670 and 10,650. Hence, staying cautious below 10,700 is advised. On the flip side, 10,750 and 10,810 may continue to act as critical resistances.

On the Nifty hourly chart, it ended nearer to its 200 EMA placed around 10,700 levels. The relative strength index continues making lower lows. The chart pattern suggests that a break down below 200 EMA is likely. The next downside support is placed around 10,670 and 10,650 levels.

Nifty patterns on multiple timeframes show consecutive bearish candle on the daily chart. The trend is likely to remain weak below 10,750. Below 10,700, the next leg of the correction towards 10,670 and 10,650 is likely.

Bank Nifty ended Tuesday 0.54 percent lower at 26,265.75. It ended the session with a bearish body candle. The index is likely to challenge its 30-EMA on the daily chart placed around 26,200. Major resistance is placed around 26,450. Below 26,200, the next support is placed around 26,100.

Based on thorough technical study, the research firm recommends Canara Bank for the near term:

Canara Bank | Rating: Sell | Target: Rs 251, stop loss: Rs 270, Return: 4%

The stock ended the previous session with a midterm upward trend line breakdown. This down move below critical support around Rs 265 is backed by rising negative open interest.

Based on the above mentioned observations, the firm recommends Canara Bank as a sell on rise for the short term downside target of Rs 251.

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.