Market outlook: Technical analysis and top 5 stock picks for July 8, 2025

The trading session on July 7 saw the Nifty 50 closing flat, indicative of cautious investor behavior preceding the July 9 deadline for a 90-day halt on US-India reciprocal tariffs and the expected trade deal. The index saw a narrow range, launching at 25,450, reaching highs of 25,490, lows of 25,407, and concluding at 25,461, with a minimal increase of 0.30 points. A Doji-like candlestick pattern emerged on the daily chart, signaling market indecision. Although the short-term trend appears erratic, the ongoing uptrend remains stable.

For the index, critical support resides in the 25,300–25,350 range, coinciding with a rising trendline and the 78.6% Fibonacci retracement level originating from the prior movement between 26,277 and 21,744. If this zone is breached, 25,200, identified by the 20-day EMA, emerges as the next support level. Conversely, resistance materializes in the 25,500–25,600 band, with 25,700 poised as the subsequent major obstacle. On the options horizon, the highest Call open interest is observed at the 26,000 level, whereas the highest Put open interest appears at 25,000, followed by 25,300 and 25,400. There was notable Call writing at 25,600 and prominent Put writing at 25,300.

Similarly, the Bank Nifty experienced a volatile session on July 7, concluding 83 points lower at 56,949 and forming a Doji pattern. Anticipated support stands at 56,600, with resistance marked at 57,500. Despite lateral movement, the overarching market trend retains its positivity, indicating buying opportunities even with price dips.

Furthermore, India VIX saw a slight uptick of 1.99% to 12.56, reinforcing bullish sentiment. The sectoral performance on the same day showed FMCG gaining 1.6%, while oil & gas rose 0.4%. In contrast, the media sector registered a 1% decline, and both the IT and metal sectors dropped by 0.7% each.

In conclusion, market observers should remain cautious yet optimistic amid prevailing uncertainties related to reciprocal tariffs and trade agreements, evident from the subdued trading activity and trend patterns witnessed on July 7. Traders must closely monitor critical support and resistance levels across indices and key sectors to navigate potential market shifts effectively.