Market Analysis: Nifty50 Displays Bullish Signal; 17,300 Marks Key Resistance, Analysts Assert
In recent sessions, Nifty Bank, previously lagging, observed a surge in short-covering as it found support near its 200-DMA.
NEW DELHI: On Wednesday, Nifty50 surged by over 1 per cent, forming a bullish candle on its daily chart. Analysts attributed this uptick partly to short covering in the banking sector. They suggest that sustained buying activity is necessary for the NSE index to signal a definite recovery.
Analysts point out resistance levels at 17,300 for the index, while identifying 17,050 as its immediate support.
“Nifty Bank, previously underperforming, saw a surge in short-covering recently as it found support near its 200-DMA. Based on the data, we anticipate Nifty50 to target the 17,250-17,300 range by the weekly expiry. For a broader market uptrend, the index must close above 17,300,” commented Ruchit Jain, Trading Strategist at 5paisa.com.
Closing the day at 17,166.90, the index recorded a gain of 183.70 points or 1.08 per cent.
Rohit Singre, Senior Technical Analyst at LKP Securities, highlighted two formidable resistance zones at 17,220-17,300 levels, indicating that Nifty50 requires a decisive breach or close above these levels to stimulate aggressive buying.
“This marks the immediate trend-defining range, and any weakness in structure would be evident below this level. Strong support is formed around the 17,050-16,950 levels,” Singre remarked.
Gaurav Ratnaparkhi of Sharekhan noted that Tuesday’s downturn found support near the hourly lower Bollinger Band.
“Subsequently, the index surged towards the intersection of the 40-hour exponential moving average and the hourly upper Bollinger Band. Additionally, Nifty50 has reached the upper boundary of the dynamic falling channel, situated between 17,230-17,250. Crossing this threshold would empower the bulls,” he stated.
Ratnaparkhi anticipates a surge in positive momentum upon surpassing the swing high of 17,324. He identifies the 17,060-17,100 range as the near-term support zone, offering a buffer against minor pullbacks.