Avoid positional trades; Nifty 50 support at 23,650 amid geopolitical tensions

The Indian stock market is caught in a difficult moment. Ashish Kyal, a technical analyst and founder of Waves Strategy Advisors, sees the Nifty 50 in a bearish short-term trend, and he is advising traders to abandon the idea of holding positions overnight. The reason is straightforward: geopolitical tensions around the world have made overnight exposure too dangerous. Instead, he recommends treating the market as a day-trading arena—buy and sell within hours, not days.

Kyal's specific guidance centers on a technical level called a gap. On June 15, the Nifty 50 created what he calls a bullish gap between 23,650 and 23,800. That lower boundary, 23,650, is now the crucial support level he is watching. His strategy is to wait for any bounce or pullback in the index, then use that moment to sell, betting on a move down toward that 23,650 level. He believes the index may temporarily break below 23,800, but that the gap area should hold as a floor in the near term. Above the market, a move past 24,103 would signal a deeper pullback upward, but until that happens, he expects the market to be driven by news and headlines rather than fundamental momentum.

Bank Nifty, the index of major financial stocks, has taken a sharper hit. It fell more than 2.5 percent and broke below 57,300, a level Kyal considers important. He views this decline not as the start of a new downtrend but as a retracement of the entire rally that began on June 3 from a low of 53,027 and peaked at 58,700 on June 25. The halfway point of that move—the 50 percent retracement level—sits around 55,890. Kyal expects Bank Nifty to trade in a range between 55,900 on the low end and 57,500 on the high end over the coming days. Any pullback toward 57,300 is a selling opportunity, with targets lower at 56,600 or even 55,900.

Beyond the broad indices, Kyal examined several individual stocks. Nykaa and JB Chemicals have both rallied sharply since June—Nykaa up nearly 25 percent, JB Chemicals up 16 percent—but both have entered overbought territory on the RSI, a momentum indicator. This means the likelihood of an immediate sharp jump higher is limited. Instead, Kyal expects both stocks to consolidate or see mild profit-taking as the RSI cools off before the next leg of the rally. For Nykaa, he suggests buying on dips as long as the stock holds above 300 rupees, with upside targets at 340 and higher. For JB Chemicals, 2,295 rupees is the immediate support; if defended, the stock could move toward 2,600 or higher.

Ather Energy presents a different picture. The stock has been forming higher highs and higher lows since February, a pattern that suggests sustained upward momentum. On July 1, it entered a narrow consolidation range between 1,114 and 1,170 rupees. In the previous trading session, it surged more than 5 percent and broke decisively above that range, suggesting the consolidation was an accumulation period before the next leg up. As long as it holds above 1,110 rupees on the downside, Kyal sees potential for a move toward 1,300 to 1,350 rupees.

Unichem Laboratories hit an 11-month high on Wednesday and has been protecting its prior day's low on a closing basis for more than a week, a sign of sustained buying interest. Strong trading volumes in the previous session confirm robust participation. Kyal recommends buying on dips, with upside potential toward 620 to 640 rupees or higher, as long as the stock holds above 520 rupees.

The broader market picture, as Kyal sees it, hinges on a simple principle: avoid holding positions overnight in this environment. Use rallies to sell, watch the key support levels, and wait for clearer signals before committing capital for the longer term. The next few days will be crucial, shaped by how geopolitical tensions evolve.