Nifty sees range breakout; hurdle clear for all-time high level?

Nifty on Wednesday reclaimed the 18,700-mark for the first time in 2023 and, in the process, breached an important resistance of 18,650 level. At close, the 50-pack index, was barely 160 points away from revisiting its record high level of 18,887.60 hit on December 1, 2022.

The momentum turned positive, as the index added on to the gap-up start and closed the session with a bullish candle on the daily scale. Yet a stiff resistance is all likely around the all-time high level. The levels of 18,650-580 may offer immediate support to the index, analysts said.

For the day, Nifty closed at 18,726.40, up 127.40 points or 0.68 per cent. This was the second highest close ever for Nifty, said Chandan Taparia of Motilal Oswal Securities who said the index has given a range breakout on the daily frame and could witness an up move towards 18,800 and 18,888 level going ahead.

"A bullish candle on and a higher bottom formation indicated further uptrend from the current levels. For the breakout traders now, 18,650 would be the key support level to watch out. Above which, the market could rally till 18,800-18,875. On the flip side, below 18,650,  the uptrend would be vulnerable and below the same, the index could retest the level of 18,600-18,550,” said Shrikant Chouhan of Kotak Securities.
   
On technical front, the daily momentum indicator has triggered a positive crossover, which is a buy signal. Both the price and momentum indicators are suggesting a continuation of the up move, said Jatin Gedia, Technical Research Analyst at Sharekhan.

Gedia sees 18,620-18,580 region to act as the crucial support for the index while he sees hurdles in the 18,800-18,889 range.

Rupak De of LKP Securities Nifty has experienced a positive breakout from a sideways pattern, which is seen as a favourable development. He said the breakout came just before the Reserve Bank of India (RBI) rate decision on Thursday.

"Market participants are anticipating a dovish stance from the RBI governor, contributing to a positive sentiment in the market. Technically, support for the Nifty is positioned at 18,650 while resistance is expected around the range of 18,880-18,900," he said.

The Put-Call Ratio (PCR), a sentiment indicator, stood at 1.456, the highest level since the start of 2023, said Ashwin Ramani, Derivatives & Technical Analyst at SAMCO Securities. Ramani said the strike price at which there is maximum concentration of open interest ahead of futures & potions contracts is 18,700. He sees 18,600 and 18,500 zone as support and the all-time high of 18,887.60 as a stiff resistance for Nifty.

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