Nifty lacks conviction at record highs; undertone remains bullish

The Indian equity market demonstrated robust performance throughout the week, with broad market participation creating a strong and positive trading environment. The benchmark index witnessed minimal price activity but firmly maintained its positive stature throughout the week. The week culminated with a modest gain of 0.15 percent, reflecting overall stability and confidence in

the market.

Despite the truncated week, Indian equities have captivated the traders’ fraternity with their impressive performance. The benchmark index has been reaching new highs, but the lack of a strong follow-up has led to a narrow range of 270 odd points.

From a technical standpoint, the small- bodied candle formations suggest that the bulls may be reaching their limit and could be waiting for an external trigger to continue their momentum.

As the Nifty index ventures into uncharted territory, it becomes challenging to identify the intermediate resistance. However, with the recent developments, 23650-23700 seem to pose a significant challenge, and a decisive closure could potentially trigger the next leg of the index's rally.

On the lower end, strong support is observed around 23400, which has proven its reliability in the previous week, followed by the crucial support of 23200-23100 (20 DEMA).

From here, if we do not witness any aberrations from the global peers, we might witness consolidation to continue. However, the outperformance of the Banking space and a further move would certainly play in favor of the bulls, hence a close tab is required over sectoral performance in the upcoming week.

Meanwhile, we would advocate traders to refrain from complacency and maintain a pragmatic approach with a stock-centric view for an outperformance.

(Disclaimer: Osho Krishan is a senior technical & derivatives analyst at Angel One Ltd, views expressed are his own)