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Indian stock market benchmarks—the Sensex and the Nifty 50—ended lower on Friday, 18 July, extending losses for the third straight week. The Nifty 50 slipped below the key 25,000 mark, signalling continued pressure on the broader market.

Over the past three weeks, the Sensex has shed nearly 2,300 points, or close to 3%, while the Nifty 50 has also declined by around 3%.

On Friday, the Nifty 50 fell 143 points, or 0.57%, to close at 24,968.40, while the Sensex dropped 502 points, or 0.61%, to settle at 81,757.73.

The broader market also came under pressure, with recent outperformers in the mid- and small-cap segments witnessing a sell-off. The BSE Midcap and Smallcap indices declined 0.62% and 0.64%, respectively.

Indian equity benchmarks extended their losses for a second straight session on 18 July, with the Nifty 50 falling below the psychological 25,000 mark to hit a one-month low. The index declined 143.05 points, or 0.57%, to close at 24,968.40 amid broad-based selling pressure, barring gains in metal and media stocks. The BSE Midcap and Smallcap indices also slipped 0.6% each, mirroring the broader market trend.

Most sectoral indices ended in the red, with notable losses in pharma, private and PSU banks, FMCG, capital goods, consumer durables, and telecom, which declined between 0.5% and 1%. On the weekly chart, the Nifty has now formed three consecutive bearish candles, underscoring sustained weakness in market sentiment.

Last Friday, the index broke below both its 50-day moving average (DMA) and the crucial 25,000 level—signalling growing bearish momentum. On the daily chart, the Relative Strength Index (RSI) has turned downward and is approaching the 43 mark, while the daily MACD remains in a negative crossover above the zero line—both indicators reinforcing the cautious tone.

As per O'Neil’s market direction methodology, the broader market status has been downgraded to “Uptrend Under Pressure" following the Nifty’s breach of its 50-DMA and a rise in the distribution day count to five.

The index’s inability to sustain above the 25,000 level and its 50-DMA reflects a clear negative bias. The next key support levels are placed at 24,750 and 24,500. On the upside, a decisive breakout and sustained close above 25,300 will be crucial to revive bullish momentum. A move beyond this could pave the way toward the 25,600–25,700 resistance zone in the near term.

The Nifty Bank index opened weak on Friday and remained under pressure throughout the session, extending its decline for a second straight day. It briefly retested its 50-day moving average at 56,163 before managing to close marginally above it. On the weekly chart, the index has now formed a third consecutive bearish candle, marked by a lower high and lower low—signaling growing caution in the broader trend.

Momentum indicators reflect weakening strength. The Relative Strength Index (RSI) has slipped to 45, indicating a gradual loss of momentum. The MACD, while still above the zero line, has registered a negative crossover—suggesting that the uptrend is losing steam, even if the broader structure remains constructive.

According to O’Neil’s market direction model, Nifty Bank continues to hold its “Confirmed Uptrend" status, a trend that has been in place for several weeks.

That said, the recent retest of the 50-DMA highlights the need for caution in the near term. A sustained move above this level—particularly a decisive breakout past the 57,000 mark—will be essential to reaffirm bullish sentiment. A close above this threshold could open the door for a rally toward immediate resistance at 57,200, with further upside potential to 57,650.

On the downside, the 56,600–56,500 zone remains a crucial support area and is likely to cushion near-term declines. Traders and investors should closely monitor these levels for effective risk management and tactical positioning.MarketSmith India is a stock research platform and advisory service focused on the Indian stock market. It offers tools and resources to help investors make informed decisions based on the CAN SLIM methodology, developed by legendary investor William J. O'Neil. You can access a 10-day free trial by registering on its website.

Trade name: William O’Neil India Pvt. Ltd.

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Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.

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