On August 23, Nifty displayed resilience during a volatile trading session, securing its third consecutive gain as it closed at 19,444, marking a 48-point increase. The day saw the index initially relinquishing morning gains after opening higher at 19,439. Despite reaching a low of 19,367 during fluctuating hours, it ultimately concluded with gains compared to the previous day. The daily chart showcased a Doji candlestick pattern, signifying proximity between the opening and closing levels. Furthermore, the index intersected the 21-day exponential moving average (EMA) at 19,471, located within the resistance zone of 19,450-19,500.
Nifty’s Resilience Amidst Volatility
Analysts note that a breakthrough above 19,500, coupled with sustained momentum, could propel the index toward 19,650. However, a potential breakdown may trigger a new round of selling.
Nagaraj Shetty of HDFC Securities highlighted, “Nifty currently grapples with crucial resistance around 19,450-19,500. A solid breach of this resistance is awaited.” Indicators suggest the likelihood of another attempt at an upside breakout near 19,500 in the short term, with immediate support recognized at 19,360. Weekly options data aligns with 19,500 as a key resistance level, while immediate support zones exist at 19,400-19,300.
Doji Candlestick Pattern on the Daily Chart
As for Bank Nifty’s movement, the day before weekly expiry saw strong market support, leading the index to surge by 486 points or 1.1% to reach a closing of 44,479. While the index displayed resilience by reestablishing above the downward sloping support trendline, it slightly fell short of sustaining above 44,500. This configuration formed a robust bullish candlestick pattern on the daily scale, breaking a six-day consolidation pattern. The index’s proximity to the 21-day (44,542) and 50-day EMA (44,505) indicates the potential for further movement towards 45,000 in subsequent sessions.
Kunal Shah from LKP Securities emphasized, “Bank Nifty’s significant breakthrough above 44,200, backed by substantial trading volumes, sets the stage for an upswing towards 44,500 levels. Overall market sentiment remains bullish.” The index’s upward trajectory seems promising as long as it remains above 44,200, with potential targets around 45,000.