NIFTY Index Chart Analysis

Nifty Struggles to Find Direction, Remains Range-Bound

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The benchmark index Nifty 50 continued to decline for the third consecutive week, as selling pressure in large-cap stocks intensified. IT and Financials played spoilsport—Axis Bank's earnings disappointed the Street; however, sentiment was later lifted by stronger-than-expected results from ICICI Bank and HDFC Bank. On the other hand, earnings from Reliance Industries, an index heavyweight, did not provide much support.

An interesting observation related to FII activity. While Foreign Institutional Investors were net buyers to the tune of Rs 24,011 crore in the cash market between March and June 2025, they turned net sellers in July 2025, offloading Rs 22,186 crore worth of equities as of July 22.

Technically, the Nifty 50 has formed a "Three Black Crows" pattern on the weekly chart, signaling a three-week losing streak. However, context is key. Prior to this bearish formation, the index had printed a sizable bullish candle. Despite the subsequent three bearish candles, the index has not breached the low of that bullish candle, indicating that the ongoing decline is likely a routine correction rather than a structural breakdown.

Interestingly, during the correction that began in September last year, the index had posted four consecutive bearish candles. Hence, the price action in the current week will be crucial. As long as the index holds above the low of the sizable bullish candle, there is no significant reason for panic.