Trade Setup For Dec. 27: Nifty Sees Immediate Support At 23,500; Breakout Likely Above 23,855

The NSE Nifty 50 is currently consolidating within a range, with immediate support identified near 23,500 and resistance at 23,855 level.

Analysts suggest that a decisive move above 23,855 level can propel the index towards 24,000-24,100 levels, while a breach below 23,500 may signal further downside.

"Technically, Nifty has been attempting to cross the 200-Day Simple Moving Average or 200-DSMA hurdle over the last three sessions but has been unable to sustain above it, forming a small red candle," Hrishikesh Yedve, assistant vice president of technical and derivatives research at Asit C. Mehta Investment Interrmediates Ltd., said.

The 200-DSMA is currently placed near 23,855, which will act as an immediate hurdle for the index. A sustainable move above 23,855 will push the index further higher to 24,000–24100 levels, according to Yedve.

"On the downside, 23,500 serves as immediate support. In the short term, the index is expected to consolidate within the 23,500–23,850 range, with a breakout on either side determining its future trajectory," Yedve said.

The Nifty ended flat on account of subdued activity ahead of the year-end holiday season. Persistent FII selling, rising bond yields and stronger dollar index continue to dampen investor sentiments, according to Siddhartha Khemka, head of research, wealth management at Motilal Oswal Financial Services Ltd. "With no major triggers in the near term, markets are likely to consolidate in a broad range."

Khemka noted that investors would closely monitor earnings revival in Q3, as it will be the next significant factor for driving the markets.

Technically, the markets consistently taken support near 23,650/78,150 while experiencing profit booking near the 200-day simple moving average or at 23,850/78,900. It also formed a small candle on the daily charts, which supports the continuation of range-bound activity in the near future, according to Shrikant Chouhan, head of equity research at Kotak Securities.

"For traders now, the immediate breakout level is 23,850/78,900 or the 200-day SMA. Above this level, the market could move up to 23,950-24,000/79,200-79,500. Conversely, if it drops below 23,650/78150, it could retest the levels of 23,550-23,500/77,900-77,700," Chouhan said.

The Bank Nifty closed marginally lower at 51,171. Yedve said that on the daily chart, the index formed a red candle. The 200 DSMA is placed around 50,560 and will act as strong support, while the 100-day exponential moving average around 51,635 serves as a resistance.

"In the short term, the index is likely to consolidate between 50,550 and 51,650, with a breakout in either direction determining its future movement," he said.