- Indian equities rose on easing US rate hike fears and lower crude oil prices
- Nifty's immediate resistance is at 22,600, with support near 22,400 and 22,200
- Failure to hold 22,600 may lead to profit-taking and a retest of lower supports
Indian equities ended higher on Monday, extending their recovery after a strong gap-up opening as easing expectations of an immediate US Federal Reserve rate hike and a pullback in crude oil prices improved investor risk appetite. However, technical indicators suggest that the broader corrective trend remains intact, with analysts highlighting 22,600 as the immediate resistance level for the Nifty.
“On the daily chart, Nifty formed a small-bodied candle with upper and lower wicks, reflecting indecision and a pause in the ongoing bearish momentum,” said Sudeep Shah, Vice President - Technical and Derivatives Research at SBI Securities.
According to Ponmudi R, CEO of Enrich Money, 22,600 remains the immediate resistance zone for the Nifty. “A sustained breakout above this level would strengthen the recovery structure and could open the way towards the 23,000 region,” Ponmudi said.
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However, failure to sustain above 22,600 could trigger renewed profit-taking and leave the index vulnerable to a retest of lower support levels, keeping the current recovery within the broader corrective trend. On the downside, 22,400 is the immediate support region, while 22,200 remains a crucial level for the recovery to hold.
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The 22,200 level has gained additional significance following the recent correction and the formation of a low near 22,217.
Bank Nifty Outlook
Bank Nifty also extended its recovery, closing 0.48% higher. The index has gained nearly 975 points over the past four trading sessions, indicating early buying traction at lower levels. However, the broader trend remains cautious until sustained buying emerges, according to Shah.
Bank Nifty has formed two consecutive neutral candles on the daily chart, with the latest candle featuring a small body and upper and lower wicks. The formation points to indecision and a possible pause in the ongoing selling trend.
On the downside, the 54,200-54,100 zone is expected to act as immediate support. A break below this range could trigger renewed selling pressure and drag the index towards 53,600. On the upside, 55,200-55,300 is likely to act as the immediate hurdle. A sustained move above this zone could extend the ongoing pullback towards 55,800, Shah said.
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