Nifty50 on Tuesday climbed for the fourth straight day and, in the process, took out the 18,000 level on a closing basis, the first time since April 4. The BSE Sensex rose 456 points to 60,571, while the Nifty50 climbed 134 points to 18,070 and formed a small-bodied bullish candle on the daily charts.
Going forward, analysts see an upside hurdle for the index at 18,150 while they see immediate support for the index at the 17,925-900 level.
“On the daily charts, the Nifty has maintained higher top higher bottom formation and it has also successfully closed above the 18,000-mark after 5 months indicating strong sentiment for the short to medium term,” said Vidnyan Sawant, AVP – Technical Research at GEPL Capital.
The momentum indicator RSI (relative strength index) is moving upward and sustained above the 65-mark which suggests a strong positive momentum of the index for the short to medium term.
The Nifty has an immediate resistance level placed at 18,150 (key resistance) followed by 18,350 (January 2022 high) and on the other side, it has a strong support level placed at 18,000 (key support) followed by 17,890 (2 days low), the market expert said.
“Momentum in the markets is positive but prudence suggests caution at these levels based on fundamental valuations in the background of historical comparison. US CPI number for August has come in slightly higher than expected. This may mute the global risk sentiments for some time. Before the start of the Q2 results, we may witness a short bout of correction. On upsides, 18,115, followed by 18,604 could be the resistance for Nifty. On falls, 17,758 could provide some temporary support,” said Deepak Jasani, Head of Retail Research, HDFC Securities.
“Technically, Nifty50 has successfully cleared the short-term resistance of 18,000 and succeeded to close above the same, which is broadly positive. On daily and intraday charts, the index is holding an uptrend continuation formation, which supports further uptrend from the current levels. For Nifty 50, 18,000 and 17,925 would act as key support levels while 18,150 -18,200 would be key resistance levels. Below 17,925, the uptrend would be vulnerable and could slip till 17,850-17,800,” said Shrikant Chouhan of Kotak Securities.
More Volatility Ahead?
Nishit Master, Portfolio Manager, Axis Securities, said: “Markets have done well over the last two months, not just in India but also globally, with expectations that inflation has peaked and interest rates should peak by the year-end. We believe that the inflation rate will come down only gradually, and thus interest rates will be higher than what markets are expecting in the next few months. This will lead to higher volatility in the near term.”
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