The new week began on a buoyant note, with NIFTY opening the session with a notable gap of nearly 350 points. However, the initial optimism was short-lived, as profit booking emerged soon after the open, gradually eroding the early gains. Sellers continued to exert pressure through the session, with prices drifting lower gradually and no meaningful recovery emerging thereafter. The index eventually wrapped up the day at the 23853 mark, registering gains of 0.98%.

After the sharp rally witnessed on Friday, the index opening the session with a notable bullish gap, has helped shift market sentiment from cautious to more optimistic. From a technical perspective, prices have now broken above a downward-sloping trendline connecting the highs formed in early and late May. Additionally, the index has reclaimed its 50 DEMA, further highlighting the increasing control of buyers over the near-term trend. The Point & Figure charts also provide further confirmation, with the formation of a bullish 100% High Pole on the 0.1% × 3 chart and a High Pole on the 0.15% chart, indicating strong buying interest and the presence of strong support at lower levels. That said, despite the improving technical structure, it would be prudent to avoid becoming overly aggressive at current levels, given the presence of strong overhead supply zones. Immediate resistance is placed around the prior swing highs near 24100, followed by the bearish gap zone near 24130. After a sharp rally of nearly 900 points from last week’s lows, a sustained close above these resistance zones would be required to confirm further upside. Until then, adopting a strategy of waiting for meaningful dips towards support zones would be a more favorable approach before considering fresh long positions. On the downside, the bullish gap formed today around the 23650 zone acts as the immediate support, followed by a stronger support band in the 23520–23500 region. The broader 23200–23100 zone continues to remain the sacrosanct support cluster.

While the outlook for NIFTY has turned constructive, the broader market participation has also improved significantly, indicating a healthy underlying momentum. Almost all sectoral indices, barring the Healthcare index, ended the session in positive territory with notable gains, highlighting broad-based buying interest. Given the improving breadth and participation, participants can now adopt a more stock-specific approach, as several stocks that witnessed significant corrections over the past year are showing signs of renewed interest and may offer attractive opportunities selectively.

Key levels to watch

NIFTY

Support: 23750 – 23650

Resistance: 24090- 24150

BANKNIFTY

Support: 56750 – 56300

Resistance: 57800 – 58850

Hitesh Rathi, Technical Analyst -Equity & Derivatives, Angel One