Weekly Outlook: Nifty, Sensex Near Key Hurdles; Bank Nifty May Rise 5%
The NSE Nifty 50 index has risen nearly 4 percent in the past three weeks from its recent low of 23,894. The Nifty is now within reach of its key resistance on the daily scale, which stands at 24,971.
The Nifty is expected to trade slightly less than 1 percent below its all-time high of 25,078 reached on August 1, 2024.
Meanwhile, the BSE Sensex is up 3.6 percent from its recent low of 78,296. The BSE benchmark is 1.3 percent or 1,043 points away from its high of 82,129.
Can the market extend its pullback this week, and will the Sensex and Nifty be able to make new highs? Here’s what the chart suggests:
Handy
Last close: 24,823
Upside potential: 2.2%
Support: 24,860; 24,600; 24,550
Resistance: 24,971; 25,000
Technically, the Nifty is seen to be trading with a positive bias as the index remains firmly above its key moving averages across time frames. Further, shorter-term moving averages are seen firmly above the longer-term moving averages; indicating underlying strength in the trend.
However, the recent 4 percent gain in the Nifty seems to lack momentum as indicated by the Di (Directional Index) which is tilting downwards as bulls and bears struggle to gain the upper hand. That said, key momentum oscillators remain favorably positioned, giving the bulls a slight edge over the bears.
For now, 24,971 levels remain the major hurdle for the Nifty. Break and sustained trading above the same level may trigger a rally towards 25,000-mark and a potential new high. The long term chart suggests that the Nifty may touch 25,370 levels in the near term.
On the other hand, holding above 24,860 is the key for the Nifty to extend the existing pullback rally. Failure to do so could trigger a corrective move towards 24,600 – 24,550 levels in the coming week. CLICK HERE FOR THE CHART
Sensex
Last close: 81,086
Upside potential: 1.5%
Support: 80,500
Resistance: 81.750; 82.260
With a high of 82,129, the BSE Sensex seems to have touched a crucial resistance on the quarterly Fibonacci chart; which indicated possible resistance at 82,260 levels. Therefore, the bias seems limited upside till end-September, as long as the Sensex does not clear this hurdle.
For now, BSE index may test 81,750 levels on the upside in the near term. Break and sustained trading above this is crucial for the index to attempt an upside breakout.
If the 81,750 threshold is not reached, the Sensex could fall back to 80,500. A drop below that to 79,900 seems likely.
Nifty Bench
Last close: 50,933
Upside potential: 5%
Support: 50,700; 50,400; 50,100
Resistance: 51.450; 51.935
The Bank Nifty, after a disappointing performance in the past two months, appears to have found support around the 20-WMA (Weekly Moving Average), which is now at 50,100 levels, and the 100-DMA (Daily Moving Average) at 49,960 levels. CLICK HERE FOR THE CHART
The short term bias for Bank Nifty is likely to remain positive as long as the index holds these two important moving averages. Intermediate support for the index can be expected around 50,700, where the 20-DMA lies, and 50,400 levels.
On the upside, the Bank Nifty is trading near its 50-DMA threshold which is at 51,450, above which resistance is seen at 51,935. After these thresholds, the Bank Nifty has a potential to rise towards 53,500 levels.
First publication: Aug 26, 2024 | 09:30 AM IST