Starting the day with a bullish gap, buyers extended the ongoing positive momentum in NIFTY. During the first half of the session, buyers continued to push prices higher, albeit gradually, briefly taking the index above 24100. However, a bout of profit booking in the second half threatened to erase the early gains. Nevertheless, buyers stepped in near the session lows and staged a quick recovery, enabling the index to end the session on an encouraging note at the 24085 mark, registering gains of 0.40%.

Prices have now extended their winning streak to four consecutive sessions, marking the longest such run in nearly two months and reflecting the improving sentiment across the broader market. The technical structure continues to turn increasingly constructive. On the 0.25% × 3 Point & Figure chart, the index has formed a Bearish Trend Reversal pattern, indicating a potential shift in control from sellers towards buyers. However, it is important to note that prices have already rallied nearly 1000 points from the lows formed last week and are now approaching a crucial swing high, which has acted as a strong hurdle in the past. While there are currently no signs of reversal in the ongoing up move, chasing momentum at these elevated levels may not offer an ideal risk-reward setup. A more favorable approach would be to utilize any dips towards key support zones to consider fresh long opportunities. On the downside, the immediate support for NIFTY lies in the 24010–23970 zone, followed by the stronger bullish gap support area of 23820–23645. On the upside, the 24130–24150 zone, aligning with a bearish gap, acts as the immediate resistance, followed by a stronger hurdle near the 24250 mark, where a downward-sloping trendline drawn by connecting the highs of April and May is positioned.

We continue to advocate a stock-specific approach to the market at this point in time, considering the strong participation visible across the broader markets. Participants should focus on identifying sectors exhibiting relative strength and stocks demonstrating favorable technical setups, as sectoral rotation continues to remain the dominant theme. At the same time, keeping a close watch on key levels of the frontline indices remains important, as any change in broader market structure could influence near-term positioning.

Key levels to watch

NIFTY

Support: 23970 – 23645

Resistance: 24150- 24250

BANKNIFTY

Support: 57130 – 56850

Resistance: 57800 – 58850

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