Sensex Technical Analysis and Prediction for July 29, 2025

The BSE Sensex presents a challenging technical landscape as of July 29, 2025, with the benchmark trading at 80,891.02, displaying pronounced bearish momentum amid a confluence of negative technical indicators and sustained institutional selling pressure. This comprehensive analysis examines the critical support and resistance levels, sectoral dynamics, and market fundamentals that will likely influence India’s premier stock index during this pivotal trading session.

The Sensex has experienced significant deterioration in its technical structure, declining approximately 1,000 points from its recent high of around 82,000 reached earlier in the month. The index currently trades at 80,891.02, representing a 0.70% decline from the previous session and marking the third consecutive day of losses. This sustained selling pressure has pushed the index below several key technical levels, signaling a clear shift from the previous bullish momentum to a more cautious bearish environment.

Current Market Position and Technical Overview

The Sensex’s recent performance reflects the broader challenges facing Indian equity markets, with the index struggling to maintain its position above crucial psychological and technical levels. The 30-stock benchmark has been particularly impacted by weak quarterly earnings from key constituents, most notably the banking sector, which carries significant weight in the index composition1 2.

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The index’s current positioning below key moving averages indicates a concerning technical setup. Trading below the 10-day EMA at 82,014.71, 20-day EMA at 82,291.01, and 50-day EMA at 81,866.27, the Sensex displays a classic bearish moving average configuration that typically signals continued downward pressure in the near term1 2.

BSE Sensex Technical Analysis Chart for July 29, 2025 – Key Support/Resistance Levels and Technical Indicators

Technical Indicators Analysis

Moving Average Configuration

The technical analysis reveals a distinctly bearish moving average setup that underscores the deteriorating market structure. The Sensex currently trades well below all key exponential moving averages, with the shorter-term averages positioned above the longer-term ones in a configuration that typically precedes extended periods of weakness1 2.

This arrangement, where the price trades below the 10, 20, and 50-day EMAs while maintaining distance from the 200-day EMA at 79,506.21, indicates that the index is experiencing both short-term momentum weakness and intermediate-term trend deterioration. The crossover of shorter-term averages below longer-term ones has generated additional selling signals across multiple timeframes.

Momentum Oscillators

The Relative Strength Index (RSI) at 36.73 indicates that the Sensex is approaching oversold territory, though it has not yet reached the extreme oversold threshold of 30. This reading suggests that while selling pressure has been significant, there remains room for further decline before technical oversold conditions provide meaningful support1 2.

The Moving Average Convergence Divergence (MACD) indicator presents a strongly bearish picture, with the MACD line at -195.40 trading significantly below the signal line at 34.231 2. This substantial negative divergence indicates accelerating bearish momentum and suggests that the downtrend may continue in the near term without intervention from supportive fundamental or technical factors.

Volatility Analysis

The India VIX, a critical measure of market volatility expectations, has surged 6.98% to 12.06, reflecting increased nervousness among traders and elevated uncertainty about near-term market direction3 4. This spike in the volatility index typically accompanies periods of heightened selling pressure and suggests that market participants are pricing in continued turbulence ahead.

A VIX reading above 12 indicates elevated risk perceptions, and the sharp increase from previous levels suggests that the current market decline is generating genuine fear rather than orderly profit-taking. This elevated volatility environment creates both risks and opportunities for traders, with increased potential for sharp moves in either direction.

Critical Support and Resistance Levels

Immediate Support Zones

The immediate support for the Sensex is positioned at 81,108, representing both a technical retracement level and a zone where institutional buying interest has historically emerged5. This level coincides with significant put writing activity in the options market, indicating strong institutional support at this psychological threshold.

Below the 81,108 level, the next substantial support lies at 80,363, representing a critical technical support zone that has been identified through pattern analysis and volume profile studies5. A decisive break below this level could trigger additional selling pressure, potentially driving the index toward the 79,939 support zone, which represents a major psychological and technical floor.

Technical analysts have identified the 24,000-24,400 range as a key support area for the broader market, with corresponding Sensex levels around 79,500-80,000 representing zones where value buying is likely to emerge4. However, a breach of these levels could signal a deeper correction phase for Indian equities.

Key Resistance Levels

On the upside, the index faces immediate resistance at 81,752, which represents the convergence of multiple technical factors including prior support turned resistance and short-term moving average resistance5. This level has been reinforced by options market positioning, with significant call writing activity observed at corresponding strike prices.

The more substantial resistance is positioned at 82,306-82,778, representing a zone where the index encounters multiple layers of technical and psychological resistance5. A sustained move above 82,500 would be required to signal a potential trend reversal and attract meaningful buying interest from institutional participants.

Beyond these immediate levels, the Sensex would need to reclaim the 83,000-83,500 zone to restore confidence in the broader upward trajectory and negate the current bearish technical setup.

Institutional Activity and Market Dynamics

Foreign and Domestic Institutional Flows

Foreign Institutional Investor (FII) selling pressure continues to weigh heavily on the Sensex, with FIIs remaining net sellers for consecutive sessions. On July 28, FIIs offloaded equities worth ₹6,082.47 crore, contributing to the sustained downward pressure on the index6 7. The month-to-date FII outflow has reached ₹36,591.13 crore, creating persistent selling pressure across large-cap stocks that form the core of the Sensex.

Conversely, Domestic Institutional Investors (DIIs) have provided crucial support, with net buying of ₹6,764.55 crore on July 28 and month-to-date purchases of ₹46,590.52 crore6 7. This divergence between FII selling and DII buying has helped prevent a more severe market decline but has not been sufficient to reverse the negative trend, indicating that foreign investor pessimism continues to outweigh domestic confidence.

Options Market Positioning

Analysis of the Sensex options chain reveals defensive positioning among market participants, with significant put buying observed at lower strike prices and elevated put-call ratios indicating bearish sentiment8. The Put-Call Ratio (PCR) of 0.70 suggests that options traders are positioning for further downside, though this level also indicates that excessive pessimism may be building, which could provide contrarian support8.

The options market structure shows heavy call writing at higher strikes, particularly around the 82,000 level, suggesting that any recovery attempts will face significant resistance from options-related hedging activities. This positioning creates a technical ceiling that will be difficult to breach without substantial fundamental catalysts.

Sectoral Performance and Earnings Impact

Banking Sector Influence

The banking sector’s poor performance has been a major drag on the Sensex, with key constituents like Kotak Mahindra Bank declining sharply following disappointing quarterly results9 3. The bank reported a significant decline in profitability, attributing the weakness to margin compression, slower fee income growth, and elevated provisions, which has created negative sentiment across the banking space.

Other major banking constituents have also faced pressure, with the broader banking sector experiencing asset quality concerns and margin pressures that have weighed on the Sensex’s performance. Given the significant weight of banking stocks in the index, this sectoral weakness has had a disproportionate impact on overall index performance.

Information Technology Sector Challenges

The IT sector, another significant component of the Sensex, continues to face headwinds from global economic uncertainties and cautious client spending10 11. Major IT services companies have reported modest single-digit growth in Q1 FY26, reflecting the impact of delayed decision-making by global clients and reduced discretionary IT spending.

TCS’s announcement of workforce rationalization, including a 2% reduction in global headcount, has added to concerns about the sector’s near-term prospects3. This development has contributed to sustained selling pressure in IT stocks, further weighing on the Sensex’s performance.

Defensive Sector Rotation

In contrast to the weakness in banking and IT, defensive sectors like pharmaceuticals have shown relative resilience, with stocks like Cipla posting gains despite broader market weakness12 9. This sectoral rotation suggests that investors are becoming increasingly risk-averse and seeking defensive positioning amid the current market uncertainty.

Global Market Context and External Factors

International Market Influence

Global market sentiment has been mixed, with concerns about trade tensions, economic slowdown, and geopolitical uncertainties affecting investor confidence worldwide13 14. The US economic data, particularly employment figures, has shown weakness, raising concerns about global growth prospects and their impact on emerging markets like India.

Asian markets have displayed volatility, with major indices trading lower as market participants await clarity on US-China trade negotiations and Federal Reserve policy decisions15. This regional weakness has contributed to the selling pressure in Indian markets, with the Sensex following the broader regional trend.

Currency and Commodity Impact

Rising crude oil prices have added to inflationary pressures for oil-importing countries like India, contributing to concerns about input costs and corporate margins3. The rupee’s performance against the dollar has also been influenced by the sustained FII outflows, creating additional headwinds for foreign investor sentiment.

Earnings Season Analysis

Q1 FY26 Performance Review

The ongoing Q1 FY26 earnings season has revealed significant challenges across multiple sectors, with companies reporting slower revenue and profit growth compared to previous quarters16 10. Early earnings trends show a nine-quarter low in growth momentum, excluding one-time gains, which has raised concerns about corporate India’s ability to deliver expected returns in the current environment.

Revenue growth has decelerated to just 4.6%, marking the weakest performance in at least nine quarters, while profit growth, though supported by one-time gains from companies like Reliance Industries, has shown underlying weakness when adjusted for these exceptional items16. This earnings deceleration has contributed to the reassessment of market valuations and the subsequent selling pressure.

Sector-Specific Challenges

The banking and finance sector has displayed particularly weak performance due to compressed net interest margins and reduced credit uptake, recording their lowest nine-quarter growth rates16. Similarly, the IT sector has faced headwinds from global economic uncertainty and delayed client decision-making, contributing to the overall earnings weakness.

Predictions and Trading Strategy for July 29, 2025

Intraday Outlook

Based on comprehensive technical analysis, the Sensex is likely to experience continued pressure on July 29, 2025. The index is expected to face immediate resistance at 81,750-82,000, with any rally likely to be met with fresh selling pressure from both technical and institutional factors.

July 29 has been identified by technical analysts as a potential inflection point, with time-based analytics suggesting possible trend reversal or continuation signals17. The critical support at 81,100 will be closely watched, as a breakdown below this level could accelerate the decline toward 80,500-80,000.

The technical setup suggests a trading range between 80,500-81,800 for the session, with a bearish bias given the momentum indicators, institutional flows, and sectoral headwinds. The elevated VIX indicates that volatility is likely to remain high, creating both risks and opportunities for active traders.

Key Inflection Points

The interaction between the current price level and the critical support at 81,100 will likely determine the near-term direction. A decisive break below this level with sustained volume could trigger a more significant correction toward 80,000-79,500, while any bounce from current levels might provide temporary relief toward 81,500-82,000.

Market participants should be particularly alert to any changes in institutional flow patterns, as a reversal in FII selling or acceleration in DII buying could provide the catalyst needed for a meaningful bounce. However, such moves are likely to be viewed as selling opportunities given the prevailing negative sentiment.

Risk Management Considerations

Given the elevated volatility and uncertain market conditions, risk management becomes paramount for traders and investors. Position sizing should be conservative, with clearly defined stop-loss levels and profit targets. Long positions should consider stops below 80,800, while short positions might target the 80,000-79,500 zone with stops above 82,000.

The high implied volatility in the options market suggests that complex strategies like iron condors or strangles might be more appropriate than directional bets in the current environment. Traders should also be prepared for increased intraday volatility and potential gap movements given the ongoing uncertainty.

Medium-Term Technical Outlook

Weekly and Monthly Perspective

From a broader perspective, the Sensex has completed its fourth consecutive week of losses, with the weekly chart showing increasing bearish momentum and a breakdown of key technical levels17. The monthly chart indicates that July 2025 could be one of the weaker months for Indian equities, potentially ending a previous streak of positive performance.

The index’s position relative to its long-term moving averages suggests that any recovery will likely be gradual and face multiple resistance levels. The 82,500-83,500 zone represents a significant resistance area that would need to be reclaimed for a meaningful trend reversal, while support at 79,500-80,000 becomes increasingly critical for preventing a deeper correction.

Fundamental Considerations

The medium-term outlook will largely depend on the evolution of several key factors, including the trajectory of corporate earnings, global economic conditions, and domestic policy responses. The current earnings weakness, if sustained, could lead to further valuation adjustments and continued pressure on equity indices.

However, India’s strong macroeconomic fundamentals, including controlled inflation, healthy monsoon prospects, and supportive fiscal policies, provide a foundation for eventual recovery. The challenge lies in navigating the current period of weak earnings and global uncertainty while positioning for longer-term opportunities.

Conclusion

The Sensex’s technical analysis for July 29, 2025, presents a predominantly bearish outlook characterized by deteriorating technical indicators, sustained institutional selling pressure, and weak corporate earnings. While the RSI approaching oversold levels suggests potential for a technical bounce, the overall trend structure remains negative with significant resistance levels capping any recovery attempts.

The critical support at 81,100 and resistance at 81,750 will define the near-term trading range, with a breakdown below support likely to accelerate the decline toward deeper correction levels. Market participants should remain cautious and employ appropriate risk management strategies while navigating this challenging technical and fundamental environment.

The confluence of weak earnings results, persistent FII selling, global economic uncertainties, and elevated market volatility creates a complex backdrop that favors defensive positioning over aggressive bullish bets. Any trading decisions should carefully consider the elevated risk environment and the potential for continued weakness in the near term, while remaining alert to any positive catalysts that could emerge from policy support, earnings surprises, or improving global sentiment.

July 29, 2025, represents a crucial juncture for the Sensex, with the potential to either confirm the current bearish trajectory or provide the foundation for a technical recovery. The market’s response to key support levels and institutional flow patterns will likely determine the index’s direction in the coming sessions, making this a critical day for both short-term traders and long-term investors to reassess their market positioning.

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