Indian equity benchmarks ended higher on Tuesday, with the Nifty 50 reclaiming the 24,000 mark despite continued weakness in information technology stocks. Analysts expect the positive momentum to continue in the near term, although they advise traders to remain level-focused as the market continues to trade within a defined range.
Shrikant Chouhan, Head of Equity Research at Kotak Securities, said the Nifty has formed a small bullish candle on the daily chart, while intraday charts indicate a reversal formation, suggesting that bullish momentum remains intact above key support levels.
According to Chouhan, the 23,900 level will act as a crucial support for the Nifty. As long as this levels hold, the market is likely to sustain its positive momentum. He also expects the Nifty to move towards the 24,150-24,250 zone on the upside.
However, Chouhan cautioned that a break below 23,900 could trigger fresh selling pressure. In that scenario, the Nifty may retest 23,800 initially and then the 20-day Simple Moving Average near 23,750.
"The current market texture is non-directional; hence, level-based trading would be the ideal strategy for day traders," he said.
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Jatin Gedia, Vice President, Technical Research at Teji Mandi Investment Technologies, said the Nifty has rebounded from the lower end of its broader trading range between 23,800 and 24,200, and expects the positive momentum to continue over the next few sessions.
According to Gedia, the immediate hurdle for the index lies in the 24,100-24,200 zone. He believes stock-specific action and sector rotation will continue to dominate until the Nifty breaks out of its current range.
Bank Nifty Outlook
The Bank Nifty also ended the session on a positive note, mirroring the benchmark index and forming a bullish candle on the daily chart.
Chouhan said the banking index continues to trade comfortably above its key moving averages despite recent consolidation, reflecting an underlying positive trend. The Relative Strength Index (RSI) has also moved higher from around the 60 mark, indicating improving bullish momentum.
On the upside, he expects immediate resistance for Bank Nifty in the 58,400-58,500 zone. A sustained move above this range could open the door for a rally towards 58,900, followed by 59,300 in the short term.
On the downside, immediate support is placed in the 57,600-57,500 zone, which traders should monitor closely for signs of weakness.
Market Recap
The benchmarks snapped a two-day losing streak. The NSE Nifty 50 closed 140.10 points, or 0.59%, higher at 24,005.85, while the BSE Sensex gained 443.97 points, or 0.58%, to end at 76,922.64.
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