Nifty Trading Analysis
On September 24, the Nifty index struggled to maintain a closing position above the critical threshold of 26,000 points due to profit-taking activities at higher levels. The market closed virtually flat, accompanied by the emergence of a modestly bullish candlestick pattern featuring a long upper shadow across the daily chart. This pattern signifies a potential for consolidation in the upcoming sessions. The Nifty currently faces resistance at 26,000, with support established at 25,800. In a similar trend, the Bank Nifty’s recent bull run, which lasted eight days, now sees resistance at 54,200 and support at 53,750, suggesting that it too may trade within a defined range.
Recent Market Performance
On Tuesday, the Nifty registered a mild gain of 1.4 points, ending at a new closing record of 25,940. Conversely, the Bank Nifty experienced a decline of 137 points, finishing at 53,969. The market showcased mixed sentiments, with 1,309 stocks declining on the NSE while 1,168 stocks advanced.
Nifty Outlook and Investment Strategy
Analyst Insights: According to Dhupesh Dhameja, a Derivative Research Analyst at Samco Securities, bulls have maintained significant control over the Nifty index, propelling it to a new high of 26,011. The index has demonstrated consistent strength over the last three trading sessions, with no candles closing below the previous day’s low. Notably, the Nifty has upheld trading levels above last week’s high of 25,850, which signals that the overall positive sentiment remains intact. Currently, the psychological level of 26,000 appears to be a formidable obstacle.
Key Levels
| Resistance | Support |
|---|---|
| 26,000, 26,200-26,300 | 25,800, 25,700-25,600 |
Trading Strategy
For traders looking to capitalize on market movements, a buy-on-dips strategy is recommended as long as the Nifty maintains levels above 25,800. If the index secures itself above the 26,000 mark, a notable upward trend can be anticipated. Specifically, if Nifty approaches the range of 25,750-25,800, consider purchasing conditional long October futures with a stop-loss set below 25,550 and aiming for targets of 26,000-26,100.
Bank Nifty Analysis
Expert Commentary: Dhupesh Dhameja also noted the Bank Nifty index’s impressive performance, reaching a new high of 54,248. The index exhibited a strong bullish structure over the last nine sessions, with no candles closing beneath the previous day’s low. Additionally, the RSI (Relative Strength Index) has surpassed 70 for the first time in six months, indicating robust momentum. The index now hovers slightly below the psychological level of 54,000, which has formed a significant resistance zone due to maximum open interest.
Support and Resistance Levels
| Resistance | Support |
|---|---|
| 54,000, 54,200-54,500 | 53,800, 53,700-53,500 |
Strategic Considerations
As long as the Bank Nifty remains above 53,500, adopting a buy-on-dips strategy is advisable. If the index breaches the resistance level of 54,200, we can expect substantial upward movement, prompting sellers to adjust their positions. Traders should consider initiating conditional long positions when the index retreats within the 53,700-53,800 range, maintaining a stop-loss below 53,450 and targeting 54,100-54,200.
Conclusion
In summary, the prevailing market conditions suggest a cautiously optimistic outlook. While the Nifty is navigating around key resistance and support levels, the Bank Nifty is displaying solid momentum. Investors and traders should remain alert for fluctuations within these ranges and look to employ strategic buying opportunities where applicable. As always, it is prudent to consult with certified financial experts before making any investment decisions.
