The benchmark Nifty 50 has been consolidating below the 200-day moving average (DMA), leaving the index trapped within the range that has persisted since nearly two years, according to Laurence Balanco of CLSA.
He identified the longer-term range for Nifty 50 at 21,700 - 22,182, and resistance at 26,000 - 26,300.
“The price action continues to consolidate beneath both the 200DMA and the June-July highs at 24,515 - 24,801. The prolonged period of indecision reflects the lack of clear directional leadership within the large-cap universe,” Balanco said in a note.
This leaves the index trapped within the broader trading range that has been in place since the October 2024 peak, he added.
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According to Balanco, until either boundary, of the support at 21,700 - 22,182 and resistance at 26,000 - 26,300, is decisively breached, the path of least resistance is likely to remain sideways.
However, the market breadth remains considerably more constructive in the broader indices.
NSE Midcap and NSE Smallcap indices continue to display significantly stronger technical profiles than their large-cap counterparts.
According to him, the NSE Midcap Index remains in a well-defined uptrend following its breakout from the 2024 - 2026 trading range. NSE Smallcap Index breakout remains intact and continues to support an upside target of 25,000.
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