The NSE Nifty 50 snapped its eight-week losing streak on Friday, rebounding 1.30% as investors stepped in to buy at lower levels after a prolonged correction. The recovery has offered some relief to bulls, but market experts believe the index needs to clear key resistance levels and sustain buying momentum before the rebound can signal a meaningful reversal.
Osho Krishan, Chief Manager – Technical and Derivative Research at Angel One, said the immediate resistance for the Nifty is placed around 22,750-22,800, followed by the psychological 23,000 mark. A sustained move above these levels would be essential to provide near-term relief and revive buying momentum.
On the downside, Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, identified the 22,350-22,330 zone as immediate support. A decisive break below this range could trigger renewed selling pressure, potentially dragging the index towards 22,200. Shah cautioned that despite the recent recovery, the market needs confirmation through sustained buying before the rebound can be considered durable.
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Nandish Shah, Deputy Vice President at HDFC Securities, pointed to encouraging technical signals on both the daily and weekly charts. The Nifty formed an inside bar on the daily chart, while the weekly chart ended with a Doji candle. Both patterns could indicate a potential reversal, particularly after the index's correction of more than 10% from its swing high of 24,774.
A positive divergence in the daily Relative Strength Index (RSI) further supports the possibility of a bullish reversal. However, these technical signals will need confirmation from subsequent price action before a sustained recovery can be established.
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Bank Nifty Outlook
Bank Nifty also ended Friday's session on a positive note after finding support at the 54,400-54,600 zone. The index rallied towards the 55,400 resistance mark, which is close to its 20-day exponential moving average (EMA).
Ponmudi R, CEO of Enrich Money, said a sustained move above the 55,200-55,400 resistance region could improve momentum and extend the recovery towards 55,800-56,000. On the downside, the 54,600-54,400 zone remains a crucial support area. A break below this range could revive the broader downtrend and push the index towards the next support region of 54,000-53,800.
The banking index's ability to hold above immediate support and cross resistance will be important in determining whether Friday's recovery has sufficient strength to continue.
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