The Nifty 50 ended nearly unchanged on Wednesday after recovering from early losses, while posting its narrowest daily trading range in more than three months. The benchmark index fell to an intraday low of 23,858.25, close to its 20-day moving average (DMA), before rebounding to 23,983. Selling at higher levels limited gains, leaving the index marginally lower for the day.
The narrow range of about 125 points comes at a time when the index continues to hold above key short-term support levels. Such periods of price compression are often followed by larger moves, placing the focus on the next directional trigger for the market.
Profit Booking Visible
The day's price action formed a small-bodied candle with a long upper shadow, indicating selling pressure at higher levels. Despite ending slightly in the red, the Nifty closed above its opening level and maintained its position above the 20-DMA.
Trading volumes remained among the highest seen in recent sessions and stayed above average. Market breadth was positive, with broader indices outperforming the benchmark. The Nifty also continued to trade above both its 20-DMA and 50-DMA, while the MACD remained in positive territory and the 14-period daily RSI held above the 50 mark.
On the hourly chart, the index closed above the moving average ribbon and continued efforts to fill the gap created earlier in the week. However, recent choppy trading suggests market participants remain cautious.
Key Levels Ahead
The 23,800-23,865 zone remains an important support area as it includes the 20-DMA, the breakout region from the recent trading range and the May 25 gap zone. A close below this band could increase the risk of a decline towards 23,684, which coincides with the 50-DMA. Below that level, the next support is seen around 23,400.
On the upside, a decisive close above 24,000 could pave the way for a move towards 24,126 and then 24,200.
Global Developments In Focus
With Indian markets closed on Thursday for Bakri Eid, investors will track overseas developments ahead of Friday's opening.
US President Donald Trump said on Wednesday that he was not satisfied with the current framework of discussions with Iran and that the United States was not considering sanctions relief.
"Iran is very much intent, they want very much to make a deal. So far they haven't gotten there ... we're not satisfied with it, but we will be. We will be either that or we'll have to just finish the job," Trump told reporters during a Cabinet meeting at the White House.
Trump also said that under a potential framework agreement, the Strait of Hormuz would remain open and would not be controlled by any country.
"We'll watch over it, but nobody's going to control it. That's part of the negotiation that we have. They would like to control it. Nobody's going to control it. It's international waters and Oman will behave just like everybody else or we'll have to blow them up," he said.
Crude Oil In spotlight
Crude oil prices rose on Thursday following Trump's remarks, while global equity markets weakened. Against this backdrop, market participants will watch whether the Nifty can continue to hold above its 50-DMA when trading resumes on Friday.
Stock To Watch: Tube Investments of India
Tube Investments of India has broken out of a 23-day cup pattern on higher-than-average volumes, signalling buying interest. The stock continues to trade above its key moving averages and is about 14.9% above its 50-DMA. The relative strength line is also rising, indicating outperformance against the broader market.
The stock's technical indicators remain supportive. Bollinger Bands are expanding, the moving average ribbon continues to trend higher and the MACD has generated a fresh bullish crossover. The 14-period daily RSI has rebounded from support near its nine-period average and moved above 60. The Stochastic RSI remains positive, while the Elder Impulse system has printed a bullish bar.
The stock may test Rs 3,485 and Rs 3,550 on the upside. A stop loss can be placed at Rs 3,020.
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