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Enroute to the gap down start on Thursday, the Nifty violated almost every near-term support from 24,100, 24,000, and at one point, even 23,900, although it managed to reclaim the latter towards the close of the session.
However, once the gap down and the initial volatility settled, the Nifty traded in a 50-point range through the session. It struggled to cross 24,000 on the upside and continued to find support at 24,950. The usual sharp swings associated with weekly expiries was also missing on Thursday as no reversal was seen from lower levels.
Another factor that could be associated with the lack of moves post the gap down is the continued flood of IPOs. After three listings on Wednesday, five new IPOs opened for subscription on Thursday and all five of them are already fully subscribed! If that isn’t it, another three IPOs open for subscription tomorrow, taking the grand total to eight IPOs open for subscription at the same time.
Going ahead, market participants are keeping an eye on Bank of England policy meeting and Q3 US GDP numbers due later on Thursday.
Foreign institutions continued to remain net sellers in the cash market on Thursday, while their domestic counterparts were net buyers.
After the steep correction, there might be mean reversion, and the Nifty may see a relief rally in the coming session, said Om Mehra of SAMCO Securities, adding that the next support level remains at 23,600.
Shrikant Chouhan of Kotak Securities believes that the short-term market sentiment remains on the weak side; however, due to temporary oversold conditions, a quick pullback rally from the current levels could be seen.
“For traders, the key support zones are at 23870/79000 and the 200-day SMA or 23825/78800. If the index remains above these levels, we could see a quick pullback rally towards 24150-24200/79500-79800. Conversely, if it falls below the 200-day SMA or 23825/78800, below which it could slip till 23750-23725/78500-78350,” he said.
LKP Securities’ Rupak De said the Nifty witnessed a sharp decline as it broke below the neckline of the inverse head and shoulders pattern. On the lower end, it found support at the low of the right shoulder. Sentiment remains weak following a hawkish comment from the Fed, which could continue to weigh on market sentiment in the short term. Support is placed at 23,850, below which further correction appears likely. Resistance is seen at 24,200.
According to Ajit Mishra of Religare Broking, the next key support lies at the 200-day exponential moving average (DEMA) around the 23,700 level. A break below this could lead to further downside for the index.
Meanwhile, the Nifty Bank index concluded the session at 51,575.70, registering a decline of 1.08%. Over the week, the index has lost nearly 3.75%, reflecting significant bearish momentum.
However, it managed to hold above the crucial 61.8% Fibonacci retracement level, positioned around 51,400.
During the intraday session, the breadth showed improvement as the morning lows were not breached later in the day. Additionally, the gap from previous sessions has been filled, which could contribute to a consolidation phase around the 51,500 zone. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) on the hourly timeframe have entered oversold territory, and a relief rally is expected in the coming sessions, Om Mehra said.
He further said that the index support remains at 51,200, while resistance is placed at 52,200. A sustained move beyond these levels could determine the next directional trend for the index.
Here are the stocks to watch out for ahead of Friday’s trading session:
Hyundai Motor India re-appoints Unsoo Kim as the managing director of the company for three consecutive years w.e.f. January 25, 2025.
IndiGo board approves grant of loan of $43 million to arm InterGlobe Aviation Financial Services IFSC.
AU Small Finance Bank approves re-appointment of Harun Rasid Khan as part-time Chairman of the bank for 3 years w.e.f. December 28, 2024.
KPI Green signs MoU with the Rajasthan Government for the development of hybrid, solar and wind power projects at Jaisalmer.
GE Vernova gets order worth ₹400 crore from Sterlite Grid32.
BASF board gives in-principle approval for demerger of agricultural solutions business into separate listed entity. This will enable operational flexibility, leverage differentiated steering & create value.
