In recent trading sessions, the Nifty 50 index has demonstrated a clear consolidation phase, oscillating within a narrow band, as market participants weigh their next moves. Analysts are closely monitoring the 21,650 to 21,850 point range, predicting this pattern may continue for a few more sessions.
The benchmark indices, after hitting new highs at the start of the year, faced a bout of profit-taking, leading to a flattening of the curve with a slight positive bias. The BSE Sensex closed slightly higher by 32 points at 72,272, while the Nifty 50 edged up by 10.5 points to settle at 21,742.
From a technical perspective, the Nifty 50 index formed a Spinning Top or High Wave kind of candlestick pattern on its daily charts, a classic sign of indecision among traders. Despite the evident high volatility at these elevated levels, the prevailing positive chart pattern of higher tops and bottoms remains unbroken, indicating the continuation of the upward trend with no significant top reversal pattern in sight as of now.
Nagaraj Shetti, a senior technical research analyst at HDFC Securities, remarked, “The near-term uptrend status of Nifty remains intact. A decisive move above 21,850 points is expected to counteract the present bearish effect, potentially paving the way for more upside in the near term. The immediate support is placed at 21,550 levels.”
Echoing similar sentiments, Deven Mehta, an equity research analyst at Choice Broking, pointed out that the index has robust support around the 21,600-21,500 zone.
Market observers are now keenly eyeing the Nifty 50’s movement in the upcoming sessions. A sustained break above the 21,850 level could signal a move towards the 22,000 mark. Conversely, a dip below the 21,650 threshold, which has been a consistent support level in the last three sessions, could see the index retreating towards the 21,500 level.
Investors and traders are advised to stay vigilant and closely follow market trends for any signs of a decisive breakout or breakdown from the current consolidation phase.