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Trade Setup For Nov 4: Nifty Bulls See Next Hurdle Near 24,000 Amid Eye On US Midterm Polls Outcome

Expert notes that as long as Nifty sustains above the 23650 level, the ongoing bullish momentum is expected to continue, with the index expected to test the 23930-23950 zone in the short term.

Trade Setup For Nov 4: Nifty Bulls See Next Hurdle Near 24,000 Amid Eye On US Midterm Polls Outcome
Image: Unsplash

As Indian benchmark indices close in green for the fourth consecutive day, surging more than 1.5% today, technical analysts expect the bullish momentum to continue, with Nifty sustaining above 23650 level.

This comes as GIFT Nifty trades 0.04% higher at 23,768.50, indicating a possible postive start to the Indian equities, while US market opened mixed on Tuesday, ahead of the US Midterms polls. The Nasdaq rose as investors tuned back into tech stocks after the recent sell-off. It opened in the green, 0.4% higher. 

According to Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, "Nifty is now trading above its 20, 50 and 100-day EMAs, with all three averages gradually turning higher, indicating improving trend strength. Momentum remains robust, as the daily RSI has surged from 42 to above 65 over the last eight trading sessions and continues to trend higher."

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In terms of outlook, he said, "Going ahead, the zone of 23650-23680 is likely to act as a crucial support area for the index. As long as Nifty sustains above the 23650 level, the ongoing bullish momentum is expected to continue, with the index likely to test the 23930-23950 zone in the short term."

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On Wednesday,  BSE Sensex index ended 1.62% or 1225.07 points higher at 76,917 and NSE Nifty 50 index ended 1.58% or 370.05 points higher at 23,810 levels. The gains in benchmark were driven by FMCG, Financials and Realty stocks, while PSU bank, Metal were among the top drags.

Speaking on Nifty, Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking said, "Index in the process closed above the 50 days EMA and the last month high (23,175) signaling strength and continuation of the up move. Index sustaining above Monday's gap area of 23,118-23,207 will signal extension of the current up move towards 23,700-23,800 levels in the coming sessions being the 61.8% retracement of the previous entire decline from 24,774-22,180."

Reflecting on outlook, Mukherjee noted, "The short-term support in Nifty is revised higher towards 22,800 levels being the confluence of the recent breakout area and the key retracement of the current up move from 22,372- 23,440."

READ | What Happens To Nifty After US Midterms? D-Street Expert Decodes Historic Trends

Bank Nifty View
The banking benchmark index Bank Nifty posted greater volatility during the session but eventually closed higher on Tuesday, up 537.85 points or 0.98% to ending at 55,540.05 points.

According to Shah, "The index is currently hovering around its 50-day EMA, while the daily RSI is placed near the 54 mark and continues to trend higher, suggesting gradual improvement in momentum."

He added, "Going ahead, the zone of 55900-56000 is likely to act as an immediate resistance area for the index. A decisive and sustained move above 56000 could trigger a fresh upside rally towards the 56600 level. On the downside, the 55100-55000 zone is expected to provide strong support and may cushion any near-term corrective decline."

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