Buyers continued to wrestle hard, holding on to key support levels. Despite the overnight news flow, the session began on a muted note, following which a volatile day ensued, with both buyers and sellers engaged in an intense tug of war for control. Despite the intraday swings, the overall trading range remained slender, resulting in a muted close at the 23270 mark, with the index registering gains of 0.23%.

There was no meaningful change to the overall technical structure of the frontline index, despite both buyers and sellers wrestling hard for control. Prices continue to face rejection at higher levels, while buyers continue to defend the crucial support zone in the 23200–23100 band. While the trend continues to remain aligned to the downside, the possibility of a bounce towards the 23500–23600 zone now appears increasingly bright, given the formation of a Bullish Zig Zag price pattern on the 0.25% 1-minute Renko charts. This development, following the formation of a Bullish Harami pattern on the candlestick chart near a key support zone, coupled with most technical indicators giving oversold readings, raises the possibility of a bounce in the upcoming session. That said, any price move or daily close below the 23000 mark is likely to invalidate these bullish developments and open the way for the next leg of the ongoing bearish swing. In terms of levels, while the 23100-23000 band remains an immediate and all-important support level on the NIFTY. On the flip side, the bearish gap in the 23630–23600 zone, which aligns with prior session highs, is a very strong hurdle, while immediate resistance is placed in the 23450-23500 band.

A smart recovery seems to have ensued in broader markets today, with breadth cooling off significantly on both NIFTY 50 and NIFTY 500 universe. While the trend still remains aligned to the downside on the NIFTY, venturing into relatively strong stocks, with suitable risk management in place, could turn out to be a fruitful adventure.

Key levels to watch

NIFTY

Support: 23100- 23000

Resistance: 23450- 23500

BANKNIFTY

Support: 55800– 55700

Resistance: 56500– 56800

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