NSE Nifty 50 reclaims 25,000, next hurdle at 25,300
The Nifty 50 index, which had been hovering just below the 25,000 mark, surpassed the key milestone on Wednesday and closed at 25,141—a level last seen on 14 October.
Over the past three trading sessions, the index had been consolidating within a narrow range of 25,055 to 25,222, signalling a pause in momentum and a lack of clear conviction from both bulls and bears, according to market experts. Now that it has broken its consolidation phase, experts say the index is headed for an upward move.
'The consolidation suggests that the market is currently taking a breather after a recent rally, awaiting fresh triggers for the next leg of the move,' said Sudeep Shah, deputy vice president and head of technical & derivatives research at SBICAP Securities.
The Relative Strength Index (RSI) on the daily timeframe is also showing signs of exhaustion, as it remains range-bound and lacks further upside traction, which indicates reduced strength in the short term, despite the index holding at higher levels, he said.
Akshay Chinchalkar, head of research at Axis Securities, said that Nifty has essentially broken out of a bullish consolidation pattern, which targets 25,800. 'The view is supported by the more risky pockets–smallcaps and midcaps–outperforming, which is a sign of increased risk appetite from investors.'
Chinchalkar said the US dollar, US interest rates and volatility are currently serving as tailwinds, further feeding into investor optimism that India-US trade negotiations will be struck without any downside surprises.
The Nifty 50 index closed 0.15% up at 25,141.40 after touching an intraday high of 25,222.4 on Wednesday. Within the index, 28 stocks advanced, while 22 declined.
Shah said that a breakout above the 25,222 level could reignite bullish momentum and pave the way for further gains towards 25,500 level, while a dip below 25,055 may lead to mild profit booking.
The Nifty 50 index could head higher towards an immediate hurdle of 25,300 and then towards 25,500 in the coming weeks, said Bajaj Broking in a note. 'Dips in the coming sessions should be used as a buying opportunity with immediate short-term support placed at 24,900-25,000 levels being the recent breakout area.'
The top sectoral gainers on Wednesday were the Nifty IT index (1.26%), Nifty Pharma index (0.5%) and the Nifty Energy index (0.3%).
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