Equity: Nifty Under Key EMAs Brings Fear Factor in Stock Market

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Markets End the Week on a Sour Note as IT Drag, Technical Breakdown Weigh on Sentiment

By S JHA

MUMBAI, July 12, 2025 — Indian equity benchmarks ended a disappointing week with a sharp sell-off on Friday, as the Nifty 50 index slipped 0.82%, closing just below the 25,150 mark. The index also logged a weekly loss of 1.24%, denting investor confidence after days of range-bound trade.

The slide was largely attributed to a gap-down opening and persistent pressure throughout the session. IT stocks led the decline following a weaker-than-expected earnings report from Tata Consultancy Services (TCS). The Nifty IT index dropped nearly 2%, triggering sector-wide weakness.

“The disappointing performance of TCS sparked aggressive selling in technology counters, weighing heavily on broader indices. The stock lost over 3% on the day, dragging peers down with it,” said Angel One in a note to clients after the market hours. The broader market struggled as well, with only 24% of Nifty stocks and 27% of Sensex and Nifty 500 constituents closing in the green.

Among notable movers, Hindustan Unilever (HUL) stood out, gaining over 4.5%, supported by strength in SBI Life. On the downside, Mahindra & Mahindra (M&M) and Hero MotoCorp both declined more than 2.5%.

Global cues offered mixed signals. US markets closed higher overnight, lending some early support to Asian indices. However, the optimism failed to carry into Europe, where major bourses ended lower, contributing to negative sentiment on Dalal Street.

Technical Breakdown: Nifty Below Key EMAs

From a technical perspective, Angel One stated that the market showed clear signs of weakening:

Nifty broke below its 10-day and 20-day EMAs for the first time in 15 sessions, a bearish signal.
The index also breached the 38.2% Fibonacci retracement level, indicating a significant technical breakdown.
Open interest jumped 4.5%, the highest for the week, suggesting a sharp build-up of short positions.
Market breadth remains poor: only 22% of stocks trade above their 5-day EMA, while 73% still hover above their 100-day EMA, reflecting an emerging short-term weakness.

Outlook: Eyes on Key Support at 24,900

Angel One, in its note to clients, highlighted that the short-term trend has turned negative. The next critical support lies near 24,900, which represents:

The 50-day EMA
The 61.8% Fibonacci retracement level (often viewed as the “golden ratio”)
The lower boundary of a rising channel that has guided the Nifty’s recent uptrend

A breakdown below this level could trigger further downside, added Angel One. “On the upside, the bearish gap zone between 25,300–25,350, which coincides with the breached 20-day EMA, is expected to act as a strong resistance zone,” added the brokerage firm.

With technical indicators turning bearish, weak market participation, and key sectoral drags, traders are advised to stay cautious in the short term. “A sustained move below 24,900 may accelerate the correction, while any attempt to rebound will face stiff resistance near 25,350,” stressed Angel One.

(Disclaimer: This article is only for purpose of information, and doesn’t recommend any trade decision in the market)

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