Demand at lower levels finally came to the fore today, with NIFTY surging by over 200 points. Following a muted start and some initial hesitation, buyers stepped in aggressively, triggering a sharp upward move. Despite a brief spell of sideways price action around mid-day, buying momentum remained intact, allowing the index to extend its gains through the session. After a prolonged period of subdued performance, NIFTY finally managed to post a positive close, settling at 22936, up 1.05% for the day.

Broader market sentiment has improved, with strong buying interest across the broader market universe and, notably, the frontline indices, which rallied well over a percentage point. Despite the breakout from the short-term consolidation range, the overall technical setup remains broadly sideways, albeit with a positive bias, supported by the emergence of strong demand at lower levels. Furthermore, with prices successfully reclaiming the 20 DEMA, short-term momentum has also turned bullish. Considering the broader trend and the improvement in the short-term outlook, we continue to advocate a buy-on-dips strategy near key support bands, while refraining from chasing the ongoing momentum at current levels. This cautious approach is further justified by the strong overhead resistance in the 23100–23160 band, where the 10-column SMA on the 0.25% P&F chart coincides with the 50 EMA, creating a significant hurdle for further upside.

In terms of levels, immediate support for the index is now likely to be found at the 22800 level, followed by a stronger cushion at the 22680-22500 band. On the flipside, 23100-23160 band is an immediate hurdle, followed by a stronger resistance at the 23400-23450 band.

Key levels to watch

NIFTY

Support: 22800- 22700

Resistance: 23100- 23160

BANKNIFTY

Support: 54500– 54400

Resistance: 55100– 55350

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