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The Indian stock market, particularly the Nifty index, has exhibited a strong positive trend in recent days, fueled by optimism surrounding the victory of Donald Trump in the US election. This optimism has translated into a surge in the Nifty, which closed Wednesday's session with a gain of 271 points, forming a long bull candle for the second consecutive day. This bullish trend has led analysts to believe that the Nifty's trajectory is shifting towards an upward direction.
Analysts are particularly focused on the potential for further gains, with the key overhead resistance level of 24,500 identified as a potential catalyst for further upside. Breaking through this resistance level could pave the way for the Nifty to reach the next target of 25,000. However, the analysts acknowledge that a decisive breakout above 24,500 is yet to materialize.
Despite the bullish sentiment, it's important to exercise caution and avoid being overly optimistic. The underlying short-term trend of the Nifty remains positive, but the immediate support level is situated at 24,350. This level serves as a crucial point for the market to maintain its upward momentum. The Nifty's recent closing above its 10-day EMA, for the first time since the start of the downtrend, further indicates a potential bullish trend reversal. However, the market is still in the early stages of this reversal, and further confirmation is needed to solidify the bullish trend.
The recent price action signals a potential trend reversal, but it's crucial to remain cautious. A decisive breakout above 24,500 is required to solidify this trend reversal and propel the Nifty towards the 24,700-24,800 range. The support level around 24,200 has shifted upwards, providing greater stability against intraday fluctuations. Traders should be aware of this support level and use it as a guide during the weekly settlement session.
Source: Tech View: Nifty forms long bull candle for 2nd day. How to trade on Thursday