The NSE Nifty 50 has entered the overbought zone after a sharp 1,500-point rally over the past four weeks, the stochastic oscillator on both daily and weekly charts, according to Bajaj Broking Research on Thursday.
It expects the index to consolidate in the range of 25,600-26,100. "On the downside, the zone of 25,500–25,700 is expected to act as a strong demand area, coinciding with the 38.2% Fibonacci retracement of the ongoing rally (24,587–25,782) and the recent breakout region — thus providing a solid technical support base," it added.
Immediate resistance is seen at 25,950, with higher levels at 26,000 and 26,100, according to Amruta Shinde, technical and derivative analyst at Choice Broking. "The index is showing a sideways to bullish bias, holding above key supports at 25,700 and 25,750."
"The overall outlook remains bullish as long as the index does not break decisively below 25,780," Shinde added.
The Bank Nifty index is expected to consolidate with positive bias, with immediate support at 57,500-57,600 levels being the last week breakout area and a stronger demand zone seen near 56,800-56,500 levels, according to Bajaj Broking research.
"The index is expected to trade sideways to bullish, staying above key support levels at 57,700–57,900. Immediate resistance is placed at 58,200–58,400, keeping the trading range between 57,700 and 58,400," Shinde said.
On the higher side, Bajaj Broking placed the resistance around 59,000 levels, being the 138.2% retracement of the entire previous decline (57,628-53,561).
"From an oscillator perspective, the Stochastic indicator has reversed upward and is nearing the overbought territory, suggesting a possible phase of consolidation with a positive undertone." Bajaj Broking said.
Market Recap
The Nifty 50 ended flat, closing below the crucial mark of 26,000. The Benchmark indices outperformed broader markets. The drag in Nifty 50 was led by Eicher Motors Ltd. and Eternal Ltd. Nifty Oil & Gas were the top sectoral losers.
Currency Recap
Rupee closed 9 paise stronger at 87.84 against US dollar. It closed at 87.93 a dollar on Monday
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