The Nifty 50 is expected to remain range-bound in Monday's session, with technical analysts identifying the 25,000 mark as a crucial resistance level while maintaining that the broader market trend remains positive despite the recent consolidation.
The benchmark index has traded within a narrow range over the past three sessions, reflecting a pause after its recent rally. Analysts believe the ongoing consolidation is healthy, with the market continuing to hold above important moving averages.
According to Nandish Shah, Deputy Vice President at HDFC Securities, the index has been consolidating between 24,400 and 24,700 over the last three trading sessions, forming a pattern of lower highs and higher lows on the daily chart. "The primary trend remains bullish, as the index continues to trade above all key moving averages," Shah said.
He expects 24,770 to act as the immediate hurdle for the index, with the psychologically important 25,000 level emerging as the next major resistance. On the downside, Shah believes the 24,430-24,380 zone is likely to provide immediate support if the index witnesses profit booking.
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Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, also maintained a constructive outlook, noting that the recent lacklustre price action has not altered the market's underlying strength.
"Despite the subdued price action, the index continues to hold above its key short-term and long-term moving averages, indicating that the broader trend remains positive. Momentum indicators have also remained largely flat over the last three sessions, suggesting a pause in market momentum," he said.
A decisive move above 24,770 could pave the way for another attempt at the 25,000 milestone, a level that is expected to witness heightened selling pressure due to its psychological significance. A sustained breakout above this mark could strengthen bullish sentiment and potentially trigger fresh buying interest.
Conversely, a breach below the 24,430-24,380 support zone could invite short-term weakness, though analysts believe any correction within this range is likely to attract buying interest given the positive medium-term trend.
Bank Nifty Outlook
Bank Nifty ended Friday's session on a positive note, gaining 0.56% and closing above the crucial 58,000 mark after trading in a narrow range throughout the day. Analysts believe the banking index continues to maintain a constructive technical structure, although momentum indicators point to a phase of consolidation in the near term.
According to Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, the broader outlook remains positive even as momentum has moderated.
"The index continues to trade above its key short-term and long-term moving averages, indicating that the broader trend remains constructive. However, momentum indicators remain largely neutral and suggest a phase of sideways consolidation in the near term," Shah said.
On the upside, Shah expects the 58,500-58,600 zone to act as the immediate resistance area. A decisive breakout above the 58,600 mark could revive bullish momentum and trigger the next leg of the rally. In such a scenario, Bank Nifty could advance towards 59,100 initially, with the 59,600 level emerging as the next upside target in the short term.
On the downside, the 290-day exponential moving average (EMA), placed in the 57,600-57,500 zone, is expected to provide strong support and act as a crucial cushion for the index. Analysts believe the broader uptrend is likely to remain intact as long as Bank Nifty holds above this support band.
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