Nifty’s Critical Juncture: Price, Time, and the Bearish Outlook

Market Commentary: July 18th – A Shifting Landscape for Indian Equities

As of July 18th, Indian equity markets are experiencing a significant pivot, with both the NIFTY and NIFTYBANK indices breaching their crucial support levels of 25,000 and 56,600, respectively. While we await a definitive daily close below these zones to confirm a breakdown, the prevailing sentiment is unequivocally bearish, a trend that has persisted since the beginning of July. This current market behavior stands in stark contrast to historical patterns, where July has typically been the most favorable calendar month for equity markets globally, including India. However, 2025 has proved to be an anomaly, and indeed, it appears poised to enter an even more dramatic phase starting in September.

The rally initiated from the April 7th low has been notably less robust than what one might expect. Despite a couple of strong gap-ups in April and a substantial 1,000-point surge in Nifty following the India-Pakistan ceasefire understanding—which propelled the index from 23,000 to 25,000—the overall momentum has been subdued. Over the past three months, there have been fewer than 15 trending sessions on the upside with daily gains exceeding 0.6%. This highlights the inherently weak nature of this rally. Adding to the complexity, our regulator later disclosed that nearly five of these fifteen positive trading sessions were influenced by instances of index manipulation. While such occurrences are unfortunately part of this profession and must be acknowledged, it underscores the fragility of the recent gains. Despite these factors, the Nifty’s two-month return remains at a flat 0%. Having traded markets since 2014, such prolonged periods of stagnation and manipulated gains are, in my experience, a rare phenomenon.

From a time-cycle perspective, July 18th was identified as a critical date, alongside July 21st. Given the downside swing observed today, a similar downward movement on July 21st would further solidify the confluence of time and price indicators, reinforcing the bearish outlook. With the India VIX currently trading below 13 (indicating low expected market volatility), a significant gap-down on Monday would be crucial to establish a strong, trending downside move. Should this not materialize, we can anticipate a slower, more protracted unwinding of positions. On the price front, 24,750 stands as a key support level; a breach of this mark would likely lead to a retest of 24,450.

INFY: Double Whammy Approaching – Gann Cycle Meets Earnings

Get ready for action, INFY traders! We’re staring down a critical Gann time cycle on July 24th, directly coinciding with the Q1 earnings release on July 23rd. This isn’t just any cycle; it marks a full rotation from the April 7th low of 1307, signaling a potential major turning point for the stock. Expect serious volatility.

Price Levels to Watch:

Resistance at 1649: This is the current ceiling. A break above it is unlikely, and it could mark the end of the recent rally.

Key Support at 1558 (Cash): Holding this level is crucial. As long as INFY stays above 1558, immediate downside risk is limited.

Downside Targets if 1558 Breaks: If 1558 gives way, be prepared for quick moves to 1526, 1490, and potentially 1450, or even lower.

Given this setup, we’re not waiting. We’re looking at options strategies that can profit from significant price swings in either direction. Whether INFY bounces off resistance or crashes through support, our options playbook will aim to capitalize on the post-earnings volatility. Think straddles or strangles to capture the magnitude of the move.

Reliance at a Crossroads: Support, Resistance, and Earnings

All eyes will be on Reliance this Friday as its post-market results release is poised to dictate Monday’s opening. Technically, the stock’s dip to 1471 this morning put a significant support level to the test. A definitive close below this point would signal a potential downward move, eyeing 1435 and even 1396 in the cash segment within the coming days. Furthermore, July 18th and 21st are key time cycle dates to watch closely. However, if 1471 proves to be a strong floor and Reliance can push past 1512, we could witness a strong upward surge towards 1556 and potentially 1600 in cash.”

Decoding AXISBANK’s Stagnation: Technicals and Critical Dates

“AXISBANK has been literally flat for several weeks now. Unlike NIFTYBANK, it has not made a fresh high, so on July 14th, that will officially complete one year from its prior peak of 1339, registered on July 12th, 2024. At the current technical setup, the stock is not at all strong. However, to make things more bearish, the stock has to break 1155 on cash. Below 1155, we should see 1130 and 1100 on cash in the next few days. On the time cycle front, July 11th and July 14th are going to be critical cycle dates.