NIFTY kicked off the new trading week on a strong note, surging past key resistance levels with ease. Following a significant gap-up opening, buyers maintained firm control during the first half of the session, steadily pushing the index higher and reinforcing the prevailing bullish momentum. However, a bout of profit booking in the second half threatened to erase a portion of the early gains. But the index witnessed a sharp surge towards the fag end of the session, largely aided by the implementation of the new settlement procedure, which propelled prices higher. As a result, NIFTY ended the day near its highs at 24774, registering gains of 1.30%.

Given the strong start to the week and the sharp upsurge witnessed in the final few minutes of trade; largely driven by the implementation of the new CAS-based settlement procedure, NIFTY has signaled a decisive breakout from its preceding three-month trading range. From a technical perspective, this breakout opens the door for a sustained extension of the ongoing uptrend, with the index likely to advance towards its previous all-time high zone of 26300–26350. This target is further reinforced by the vertical count objective derived from the breakout on the Point & Figure chart, lending additional conviction to the bullish outlook. That said, the breakout is currently reflected only on the cash index, while NIFTY Futures continue to encounter selling pressure near the key 24600 resistance zone. This divergence between the cash and futures markets warrants caution, as confirmation across both segments would strengthen the validity of the breakout. In light of these developments, it would be prudent to adopt a wait-and-watch approach and seek further confirmation before conclusively declaring a breakout. Greater clarity is likely to emerge ahead of the next trading session, once the market fully adjusts to the new settlement framework. From a levels perspective, the 24450–24350 band is expected to attract buying interest in the event of any near-term weakness and should act as the first support zone. On the upside, the 25000–25150 band is likely to emerge as the immediate resistance zone before the index attempts a move towards higher levels.

While the broader market continues to witness strong stock-specific performances, the MIDCAP index once again encountered selling pressure near its previous all-time highs, highlighting the presence of strong overhead supply. In light of this development, it would be prudent to adopt a wait-and-watch approach rather than an overly aggressive stance at the current juncture.

Key levels to watch

NIFTY

Support: 24450- 24350

Resistance: 25000-25150

BANKNIFTY

Support: 57200 – 57000

Resistance: 58400 – 58500

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