It became clear on Tuesday itself that for the Nifty to move higher, the banks will have to do the heavy lifting as the rest of the market is sulking. Wednesday’s session provided some more hope as even Reliance Industries put its hand up in contributing to the Nifty gains along with the banks. However, neither Reliance, nor banks could sustain their gains, and therefore, neither could the Nifty.
The Nifty may have ended only 27 points lower on Wednesday, but the fact that this drop came after a 210-point correction from the highs of the day is something that will disappoint the bulls.
We had mentioned earlier in the week that the Nifty has moved from the lows despite any significant contribution from HDFC Bank. That too reversed on Wednesday as both HDFC Bank and ICICI Bank ended with gains, but the rest of the market provided no support.
Thursday’s session now brings with it the weekly expiry of the BSE contracts. The bulls would also be hoping for no further deterioration in West Asia and that oil prices do not go back to the $100 a barrel mark, even though they remain rangebound despite the aggressive rhetoric exchanged from both sides.
What Are The Key Levels For The Nifty?
With the Nifty having failed to sustain above the 23,400 mark, the 23,400 – 23,500 zone is proving to be a tough barrier for the Nifty to cross and sustain above. Even as the index has made a higher high and a higher low on the daily chart, there is constant selling pressure emerging at higher levels.
Wednesday’s high of 23,424 becomes the first level on the upside for the Nifty to recapture, while on the downside, the 23,150 – 23,100 zone should act as a support in case of further downside. Monday’s low of 23,070 is the line in sand for the bulls, below which, downsides towards 23,000 or even 22,700 becomes possible for the index.
Is The Nifty A Buy Or A Sell?
Nandish Shah of HDFC Securities noted that the Nifty continues to remain in a downtrend, trading below all key moving averages. He warns that a decisive close below the 23,070 level could trigger further downside for the index towards 22,700 – 22,800 zones, which could then act as a support. On the upside, 23,515 will act as a resistance on any pullback.
The 23,350 level on the upside would act as an immediate resistance zone for the Nifty bulls, according to Shrikant Chouhan of Kotak Securities. Till the time the index trades below that level, Chouhan expects the index to retest levels of 23,100 – 23,050 on the downside.
On the flip side, a move above the 23,350 mark could take the index back towards the 23,425 – 23,500 zone.
Vatsal Bhuva of LKP Securities said that the short-term Nifty trend remains under pressure, while the RSI also remains below the mark of 50 as the index consistently is trading below its 20-Day Moving Average. He advises rangebound trading over a directional view as he sees the Nifty to trade in a lower band of 23,100 and an upper band of 23,450 – 23,550 levels.
