Nifty bulls will look to defend the crucial 23,000 level on Wednesday, as the markets will remain on tenterhooks due to the rapidly escalating situation in the Middle East. The United States has warned Iran to accept its truce conditions by 8:00 pm ET (5:30 am IST), failing to which, it would launch massive bombings on the country's power plants and key infrastructure.
"The zone of 23,020–23,000 zone is likely to act as an immediate support," said Sudeep Shah, head of technical and derivatives research at SBI Securities.
On the flip side, if the market moves forward amid a breakthrough or easing in the US-Iran tensions, then Nifty will immediate resistance in the 23,230-23.250 zone, he added.
'Any sustainable move above this zone could result in Nifty extending its pullback towards 23,400, followed by 23,600 in the short term," the analyst further said.
According to Bajaj Broking Research, the index formed a bullish candlestick pattern with a higher high and a higher low for the second session in a row, signaling continuation of the pullback from the oversold territory. "Volatility is likely to remain elevated in the near term, amid geopolitical tensions and higher crude oil prices," it said.
The brokerage said that the index needs to form a sequence of higher highs and higher lows in the daily chart, along with a sustained close above 23,465 to signal a reversal in the downward trend.
Bank Nifty
The Bank Nifty's immediate resistance is placed in the 53,100-53,200 zone, according to Shah.
"Any sustainable move above this zone could result in Bank Nifty extending its pullback towards 53,500, followed by 53,800 in the short term. On the downside, the zone of 52300–52200 zone is likely to act as an immediate support," the analyst said.
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According to Bajaj Broking, a follow through strength above Tuesday's high 52,800 will open further upside towards 53,500 levels. Failure to do so will lead to consolidation in the range of 50,000-52,700, it said.
Market Recap
Indian equity benchmarks erased morning gains and ended near day's high on Tuesday. The NSE Nifty 50 ended 0.75%, or 155 points, higher to close above 23,100 after falling as much as 1.1% to 22,719 during the session. The BSE Sensex gained nearly 510 points to close above 74,600 after dropping as much as 1.1%, or 824 points, to 73,282 intraday. The benchmark indices extended declines for the fourth consecutive trading session.
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