Trade Setup for July 23: Nifty still under threat to slide below 24,900, analysts warn

The Indian equity market ended on a flat note on Tuesday after a rangebound session.

The benchmark Nifty 50 opened mildly positive, in line with cues from Gift Nifty, but failed to sustain early gains as selling pressure emerged soon after the open.

The index gave up its morning momentum and traded sideways for most of the day.

Eventually, Nifty closed with a marginal loss of 0.12%, settling just above the 25,050 mark.

Among the top gainers on the Nifty were Eternal, HDFC Life, and Hindalco, while Shriram Finance, Eicher Motors, and JIO Financial led the list of laggards.

Broader markets fared worse. The Nifty Midcap 100 gave up all of Monday’s gains, slipping 0.61%, while the Nifty Smallcap 100 fell for the fourth straight session, declining 0.34%.

All sectoral indices ended in the red. Nifty Media, PSU Banks, Realty, Pharma, and Financial Services bore the brunt of the selling pressure, logging the steepest losses.

Foreign investors were net sellers in the cash market on Tuesday, while domestic investors were net buyers.

Nagaraj Shetti of HDFC Securities said that the underlying trend remains weak amid choppy movement. After being rejected near the 25,200 mark, the Nifty now faces the risk of slipping below 24,900 in the coming sessions.

A breakdown could open the door for further downside toward 24,500, he said, with immediate resistance placed at 25,200.

Rupak De of LKP Securities said that the Nifty remained range-bound, facing resistance at the 21-EMA in early trade and failing to move above the 50-EMA on the hourly chart.

According to him, the index remains stuck in a consolidation zone, with 24,900 acting as strong support and resistance seen at 25,260. A breakout above this level could trigger renewed strength.

Rajesh Bhosale of Angel One highlighted that despite Monday’s strong close, there was no follow-through buying on Tuesday, with the Nifty once again facing resistance at the 20-DEMA, a level that has repeatedly capped upside moves over the past week.

He added that the index has now slipped back toward the lower boundary of a rising channel pattern and has retraced nearly 50% of Monday’s low-to-high upmove, signaling waning momentum.

The next 100-150 points could be crucial for determining market direction, with 24,900 (Monday’s low and the 50DEMA) serving as key support. Immediate resistance is seen in the 25,200–25,250 zone.

Nandish Shah of HDFC Securities said the Nifty was unable to close above its 5-day DEMA, which is currently at 25,093, while the positional support at the 50-day DEMA remains intact at 24,943. Going forward, 25,255 is likely to act as a key resistance, he added.

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