It was a muted trading session for NIFTY, as buyers failed to build on the bullish momentum from the previous session, with the index trading mostly in the upper half of the prior session’s range. The index opened on a subdued note, with sellers exerting pressure right from the outset amid an intense tussle between buyers and sellers. A sudden mid-session spike to the downside threatened to wipe out the gains made in the previous session. However, buyers managed to defend lower levels and recover some of the losses, eventually bringing the index to a close at 22,622, down 0.44%.

As highlighted in our previous commentary, prices remain range-bound in the near term, with a strong resistance zone in the 22,750–22,800 band, while demand continues to emerge in the 22,100–22,200 zone. Unless the index stages a convincing breakout above this resistance zone, the near-term upside is likely to remain capped. Against this backdrop, rallies toward the 22,750–22,850 zone could be utilised to initiate short positions, while dips may offer opportunities to initiate long positions, given the ongoing consolidation. It is important to note that although recent dips have attracted strong demand at lower levels, the subsequent buying has failed to generate meaningful follow-through, suggesting that the ongoing up move could potentially be a short-covering rally rather than a sustained bullish reversal. Until a decisive breakout emerges, the broader setup warrants caution. With prices still confined to a range and the immediate trend remaining tilted to the downside, a buy-on-dips approach within the prevailing range is likely to yield better results than chasing upward momentum. In terms of key levels, immediate support is placed in the 22,550–22,470 band, while the 22,750–22,800 zone remains the immediate hurdle. A stronger resistance zone lies higher up, in the 22,950–23,000 band.

Key levels to watch

NIFTY

Support: 22550- 22470

Resistance: 22750- 22850

BANKNIFTY

Support: 55100– 54700

Resistance: 55600– 55800

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