Technical View: Nifty 50 showed a remarkable recovery of almost 200 points from the day’s low due to counter attack by bulls. On December 31, the last day of calendar year 2024, the index closed flat with a positive trend. The recovery increased the chances of the index rising towards 23,900. However, to reach this level the index will have to decisively overcome the resistance of 23,700. According to experts, till then the level of 23,500 is expected to act as an immediate support level. Below this, important support is expected at the level of 23,400.
Nifty started the day with a decline. It fell to 23,460 in the morning. But soon recovery started. After this it closed up 13 points at 23,658. This action defended the upward sloping support trendline, forming a bullish candlestick pattern with upper and lower shadows on the daily chart.
How could Nifty move on Wednesday, January 1?
Technically this market action is indicating a counter attack by the bulls after an attempted false downside breakout. Nagaraj Shetty of HDFC Securities said, “The important 200-day EMA is again in the headlines. The bounce seen on Tuesday could be an early sign of another round of bullishness in the market.”
Overall, Nifty is expected to remain in a broad range of 23,500-24,000 in the near term. According to Shetty, after making a comeback from the lower range, it is likely to rise towards 24,000 level in the coming week.
In the week so far, Nifty has formed a small red candle on the weekly chart. It is visible next to the same green candle of last week. Nagaraj said, due to this, broader rangebound movement may be seen in the market.
According to derivative data, Nifty may be seen trading within the range of 23,000-24,000 in the short term.
How can Bank Nifty move on Wednesday, January 1?
Bank Nifty also defended the upward sloping support trendline. This formed a bullish candlestick pattern on the daily chart. This pattern is indicating strength. Despite this, it fell 66 points on Tuesday and closed at 50,887. The index has got support at 50,600. This support level matches the 200-day SMA or last week’s low.
Hrishikesh Yedve of Asit C Mehta Investment Intermediates said that in the short term, Bank Nifty is expected to trade within the 50,500-52,000 range. In which breakout in any direction will decide its further move.
Yedve said that the upside is seen near the 50-day exponential moving average (50-DEMA), 51,915. This level will act as a resistance level.
On the downside, India VIX, a volatility index, rose above 14 points. This is indicating some caution for the bulls. The index closed 3.4 percent higher at 14.45 after rising 5.55 percent in the previous session.
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