The Nifty remained locked in a choppy trading range on Thursday but managed to end the session at 24,395, closing above its key 20-day and 200-day daily exponential moving averages (DEMAs). The index has now closed above both these moving averages for the second consecutive session, keeping the near-term setup constructive for the bulls.
According to Vinay Rajani, Senior Technical Research Analyst at HDFC Securities, the Nifty's 20-day DEMA stands at 24,363, while the 200-day DEMA is placed at 24,385. The ability to sustain above these levels will remain important for the index in the near term.
"The immediate support is placed at 24,265, followed by the psychological level of 24,000. On the upside, 24,630 and 24,750 remain the key resistance zones to watch. Sustained trading above 24,265 could keep the short-term bias positive, while a decisive close below that would weaken the setup," Rajani said.
This suggests that 24,265 will be the crucial near-term support level for the Nifty. As long as the index holds above this level, the short-term bias is likely to remain positive, with traders keeping an eye on 24,630 and 24,750 on the upside. A sustained move above 24,750 could strengthen the bullish setup, while a break below 24,265 could lead to increased selling pressure and bring the 24,000 level into focus.
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While the price structure remains encouraging, momentum indicators are showing signs of moderation. "Momentum indicators are gradually weakening. RSI has declined to 52, indicating a loss of momentum while still holding marginally above the neutral 50 level," said Ponmudi R, CEO of Enrich Money.
The RSI reading of 52 indicates that momentum remains in positive territory, but the decline towards the neutral 50 mark suggests that the recent upside momentum is losing strength.
Nifty Bank Outlook
Bank Nifty started on a weak note and slipped lower before moving into a range-bound phase. The index eventually closed at 57,635, down 0.43%. On the daily chart, Bank Nifty formed a small-bodied bearish candle and remained within the previous session's trading range, signalling indecision among market participants.
According to Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, the immediate resistance for Bank Nifty is placed in the 57,900-58,000 zone. On the downside, the 57,200-57,100 zone is likely to act as the immediate support area.
Therefore, a decisive move above 58,000 could strengthen the pullback and open the way towards 58,400-58,800, while a break below 57,100 could weaken the near-term setup.
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