- Nifty likely to consolidate between 24,000-23,950 support and 24,170-24,200 resistance zones
- A break below 23,950 could lead to further decline towards 23,800 in the near term
- Nifty trades below key moving averages, showing limited momentum and sideways RSI trend
The Nifty is likely to remain in a consolidation phase in the near term, with the 24,000-23,950 zone emerging as a crucial support area and 24,170-24,200 acting as the immediate resistance band, according to technical analysts. Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, said a sustained breach below 23,950 could weaken the near-term market structure and trigger further downside towards 23,800.
“Going forward, the 24000-23950 zone is expected to serve as a crucial support area for Nifty. A sustained breach below 23950 could weaken the near-term market structure and open the door for a further decline towards the 23800 mark in the short term,” Shah said.
This comes as GIFT Nifty trades 0.27% lower at 24,154.50 after US markets were trading lower on Monday. Dow Jones fell 0.67%, while S&P 500 and tech heavy Nasdaq were trading 0.50% and 0.44% lower following a renewal in military tensions between the US and Iran with regards to the Strait of Hormuz.
On the upside, the 50-day EMA band of 24,170-24,200 is expected to act as an immediate and significant resistance zone. A decisive move above this level would be required to improve sentiment and pave the way for a stronger recovery in the index.
Shah said momentum indicators and oscillators are also pointing towards a lack of a clear directional bias.
ALSO READ: Kotak Mahindra Bank Submits Two Internal Names To RBI For Next CEO: Report
“The daily RSI moving in a sideways range over the last 14 trading sessions” indicates the absence of a strong bullish or bearish bias, he said.
Technically, Nifty continues to trade below its key moving averages. The 50-day, 100-day and 200-day EMAs remain largely flat, suggesting limited directional momentum and an ongoing consolidation phase. Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, said the 24,000 level remains an important support despite continued external headwinds.
“The price action suggests that, although external headwinds continue to weigh on sentiment, the 24,000 level remains a key line of defence that market participants are not yet willing to concede,” Radhakrishnan said. A decisive move below this level could therefore increase selling pressure, while sustained trade above the resistance zone could signal an improvement in the near-term setup.
Bank Nifty Outlook
Bank Nifty ended the previous session on a positive note after a volatile trading session, with the index eventually closing above the 58,000 mark. Ponmudi R, CEO of Enrich Money, said the index initially attempted a recovery after opening lower, but gains were capped near the 57,500-57,600 resistance band. It subsequently declined towards the 57,300-57,200 support region before moving in a range and staging a late recovery.
“On the downside, a break below 57,800 could open the door toward 57,600-57,500, which is the immediate support,” Ponmudi said.
On the upside, sustaining above 58,000 will be important, with the next resistance placed at 58,200-58,300. Momentum indicators have also improved. The RSI has moved higher towards 57, while the MACD line is attempting to cross above its signal line from below. The histogram has also turned green, suggesting a possible deceleration in bearish momentum and an early shift towards a bullish crossover.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.