It was an encouraging session of trade for the frontline index, with buyers managing to hold relatively elevated levels throughout the day. Starting the session with a gap down, the index witnessed some initial volatility, but buyers gradually regained control and kept pushing prices higher gradually. The sustained buying interest helped NIFTY eventually secure a day-high close at the 24175 mark, registering gains of 0.71%.

The technical structure appears to be turning decisively in favor of the bulls. Prices have now secured their highest daily close in nearly two months, highlighting the improving sentiment on the street. Technically, while the index continues to trade below its recent swing high, it has successfully broken above a downward-sloping trendline, connecting the highs formed in April and early May. Adding further strength to the setup, a bullish crossover of the 20 DEMA above the 50 DEMA on the daily chart provides another confirmation of improving momentum. That said, a decisive daily close above the recent swing highs would firmly shift control in favor of buyers. A similar picture is emerging on the Point & Figure chart as well. On the daily 0.25% × 3 P&F chart, the index is on the verge of delivering a bullish follow-through to a Bearish Pattern Reversed formation, which would be activated on a daily close above the 24218 mark. While NIFTY continues to exhibit strength, a bullish follow-through in BANKNIFTY, which has lagged the broader index over the past few sessions, would provide an additional boost to the ongoing up move. At the same time, the NIFTY Midcap index is retesting a crucial downward-sloping trendline drawn by connecting the highs formed in May and June. A decisive breakout above this trendline would further strengthen the broader market setup and add fresh fuel to the improving bullish sentiment.

In terms of levels, the 24100–24050 zone, which previously acted as a resistance band, is now likely to serve as the immediate support cluster, followed by a stronger support zone in the 23850–23800 band. On the upside, immediate resistance is placed in the 24220–24250 zone, followed by a stronger hurdle in the 24450–24500 band. Participants should closely monitor these levels for a potential breakout and look to participate only once a decisive move above or below the mentioned zones materializes.

Key levels to watch

NIFTY

Support: 24100 – 24050

Resistance: 24220- 24250

BANKNIFTY

Support: 57850 – 57450

Resistance: 58425 – 58700

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