Stock Market Outlook: Sensex, Nifty May Face Selling Pressure; Downtrend Likely to Persist Amid Weak Technical

On Monday, August 4, the Indian stock market is expected to open on a cautious yet slightly positive note, as reflected by the trends in Gift Nifty, which was trading around 24,675, indicating a modest premium of 48 points over the Nifty futures' previous close.

Stock Market Outlook Today, August 4

This suggests that there could be an initial bounce, though the overall sentiment remains under pressure due to recent persistent declines in both benchmark indices.

The BSE Sensex ended Friday's session on a weak note, declining by 585.67 points or 0.72% to close at 80,599.91. On a weekly basis, the index has dropped by 1.08%, marking its fifth straight week of losses.

"Nifty corrected by 1.09% and closed at 24565 levels. This was the 5th consecutive week where nifty corrected. SENSEX corrected by 1.06% and closed at 80599 levels," noted market expert Anuj Gupta.

Sensex Prediction Today

The immediate resistance for Sensex lies in the 81,500-81,700 zone, a region that earlier acted as a strong support but has now turned into resistance. Given this repeated failure to sustain higher levels, investor sentiment remains cautious, and any upward movement is likely to face strong selling pressure near this zone. If Sensex breaks below the 80,000 psychological mark, it may accelerate downside momentum.

Nifty Prediction Today

The Nifty 50 also exhibited bearish momentum last week, closing at 24,565.35, down 203 points or 0.82% on Friday. The index has now fallen for five consecutive weeks, reflecting sustained weakness in market breadth and investor risk appetite.

Technically, Nifty has formed a bearish candle on the daily chart,indicating selling pressure. It has also fallen below key support levels, the 20-day, 50-day and especially the 100-day Exponential Moving Average (EMA), which was breached on August 1.

These moving averages act like trend indicators, and trading below them suggests that the market is in a downtrend. Overall, this signals that sellers are in control and the Nifty may continue to face downward pressure in the near term.

Momentum indicators also confirm the bearish sentiment. The Relative Strength Index (RSI) stands at 36.01, indicating it is nearing oversold territory but still trending downward, while the MACD remains below the zero line with a weakening histogram - highlighting the dominance of sellers in the market.

Nifty50 Technical View, Options Data Analysis: What Traders Are Expecting?

The weekly options data shows that resistance is building up at higher levels. The maximum Call open interest (OI) is placed at the 25,000 strike (1.09 crore contracts), followed by 24,800 and 24,700 strikes, indicating that these levels may act as strong resistance zones for any upside move.

Moreover, heavy Call writing at the 24,800 (65.22 lakh contracts) and 24,700 (61.75 lakh contracts) levels further reinforces the view that the bulls may face hurdles if the index attempts to rise.

On the Put side, the 24,200 strike holds the highest Put OI at 62.55 lakh contracts, suggesting this level may act as a crucial support in the near term. It is followed by the 24,000 and 24,500 strikes, indicating layered support zones. Significant Put writing at the 24,200 strike (36.62 lakh contracts) reflects trader confidence in this level holding up, although any breach could intensify selling pressure.

Meanwhile, the Put unwinding at higher strikes such as 24,800 and 24,900 shows that traders are reducing bullish bets at those levels.

'The Indian stock market is expected to begin the week on a muted and cautious tone, with possible intraday recoveries, but overall sentiment remains bearish. The Nifty's technical and derivative data indicates that 24,200 is the immediate support, and a break below this could open the door to 24,000 or lower. On the upside, the 24,700-25,000 zone remains a key resistance area. As for the Sensex, it may attempt a mild bounce but is likely to face selling near 81,500-81,700 unless broader sentiment improves," said expert Amit Sethi.

Disclaimer

"The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision."