Trade Setup For Oct 6: Nifty's Positive Momentum Likely To Continue; Support At 24,730

Analysts expect the momentum to extend into this week after the benchmark indices ended the truncated week in positive.

The daily chart indicates that NSE Nifty has formed a bull candle with a higher high and higher low, signalling extension of the pullback for the second session in a row, according to Bajaj Broking Research.

"The formation of bullish candles at such a pivotal juncture augur well for the bulls, suggesting that positive momentum is set to extend further," said Rajesh Bhosale, equity technical analyst at Angel One. Immediate support is at 24,730, followed by 24,600, he added.

"This has created a tight pivot corridor between 24,600 and 25,100, with a decisive close beyond either side likely to dictate the next big move. For now, the bias stays mildly positive as long as the 24,600 base holds," says Ponmudi R, CEO of Enrich Money, a SEBI-registered online trading and wealth tech firm.

The Bank Nifty continued to demonstrate strength on Friday, according to Bajaj Broking. While resistance will be at 56,150, support is placed at 54,800 and 55,000.

"The formation of a higher bottom here almost confirms an “Inverse Head and Shoulders” pattern, with RSI Smoothened supporting a pre-emptive breakout, fueling further momentum for the benchmark index in the coming days," said Bhosale.

The Indian benchmarks extended their gains into the second day this week and closed higher. The Nifty 50 closed 0.23% higher at 24,894.25 while Sensex closed 0.26% higher at 81191.58. All sectoral indices gain higher for the week.

"After extending the selling pressure from the previous week in the initial sessions, the tone shifted mid-week with the RBI policy outcome sparking a strong turnaround. The momentum carried forward into Friday as the bulls extended gains, helping Nifty end just below the 24900 mark and securing weekly gains of around 1%," said Bhosale.

The rupee depreciated 7 paise to close at 88.78 (provisional) against the US dollar on Friday, near its all-time low level, on dollar demand from importers and persistent foreign fund outflows.