Nifty witnessed a gap-down opening, testing levels around 23400 during the initial trades. However, there was no follow-up selling, and as the day progressed, prices gradually inched higher, recovering all the morning losses to eventually end with gains of around 0.17%, closing tad above the 23659 mark.

If we observe the chart structure over the past week, gap-down or weak openings have consistently witnessed buying interest, whereas positive openings have seen profit booking from higher levels. Overall, prices continue to remain in a consolidation phase, with the index forming alternating small red and green-bodied candles while trading within a tight range. Currently, the immediate trading band is placed between 23300 – 23200 on the downside and 23800 – 23900 on the upside. The lower end of this consolidation range coincides with the 50% – 61.8% retracement of the rally witnessed from the April lows of 22182, while the higher end near 23800 – 23900 aligns with the 20 DEMA and last week’s high. The next meaningful directional move is likely to emerge only on a breakout beyond this range. Considering the relative strength visible in the broader markets, the probability currently favours an upside breakout; however, until a decisive breakout is confirmed, traders are advised to continue with a strategy of buying near support levels and booking profits near resistance zones.

NIFTY

Support: 23400 – 23250

Resistance: 23900 – 24000

BANKNIFTY

Support: 53000 – 52800

Resistance: 54000 – 54300

Rajesh Bhosale, Technical Analyst, Angel One