The Nifty50 closed above the 24,000 mark for the first time since May 8 after breaking out of a two-week consolidation range, with easing crude oil prices and hopes of progress in U.S.-Iran talks supporting sentiment.
The index rose 312.40 points, or 1.32%, to close at 24,031.70 on Monday after moving within a narrow band for most of the session. Buying in the final hour pushed the benchmark near the day's high and helped it sustain above a key resistance level.
The move comes after the Nifty traded between 23,262 and 23,860 for the past two weeks. Monday's breakout above the upper end of that range has raised expectations of a further move higher, though traders will watch whether the index can hold gains during the monthly May derivatives expiry session on Tuesday.
Global Cues Support Market
The Nifty opened with an upside gap of nearly 220 points after reports indicated that the U.S. and Iran were moving closer to a peace agreement. Crude oil prices also fell more than 5%, supporting risk appetite across global markets.
After the sharp opening, the index remained range-bound for most of the day before fresh buying emerged towards the close.
Technically, the session formed a strong bullish candle, while the opening gap remained unfilled. The index also closed above its 20-day moving average for the first time since the breakdown seen in early May.
The Nifty has also moved back above its 50-day moving average, strengthening the near-term market structure.
Breakout Puts 24,450 Zone In View
Based on the width of the recent consolidation range, the measured upside target for the breakout stands near 24,458.
That places the next potential upside zone around 24,450-24,460, which also coincides with the swing high recorded on May 7.
On the downside, the 23,850-23,900 range is expected to act as immediate support.
Before moving towards the higher target zone, the index may face resistance around the May 11 gap-down area between 23,997 and 24,127, which has only been partially filled so far.
A sustained move above that zone may strengthen the case for a further rally.
Momentum Indicators Improve
Momentum indicators have also turned supportive.
The daily moving average convergence divergence indicator, or MACD, has generated a bullish crossover, while the 14-period relative strength index, or RSI, has moved above the 54 mark.
On the hourly chart, the RSI has crossed above 60 for the first time since May 7, indicating improving short-term momentum.
With Tuesday marking the monthly May F&O expiry session, traders are likely to remain alert to higher intraday volatility.
Stock To Watch: Max Financial Services
Shares of Max Financial Services have broken out of a one-month consolidation range after correcting nearly 24% from their February high.
Following the decline, the stock attempted a recovery from its April low but repeatedly faced resistance near the 61.8% Fibonacci retracement level of the fall between February and April.
The stock later entered a consolidation phase with support placed around Rs 1,560-1,566 and resistance near Rs 1,719-1,722.
On Monday, the stock moved above the upper end of that range and crossed the key retracement level, indicating renewed buying interest after more than a month of sideways movement.
The stock is now trading above all major moving averages. The 14-period daily RSI has crossed above 60 and moved past its previous swing high, while the MACD has also generated a bullish crossover.
If the stock sustains above Rs 1,730, it may move towards Rs 1,800 and then Rs 1,840, while Rs 1,635 remains the immediate stop-loss level.
Disclaimer: The views expressed in this article are solely those of the author and do not necessarily reflect the opinion of NDTV Profit or its affiliates. Readers are advised to conduct their own research or consult a qualified professional before making any investment or business decisions. NDTV Profit does not guarantee the accuracy, completeness, or reliability of the information presented in this article
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