Technical view: Decisive move will come in Nifty only after it breaks 24,400-25,200 range

Sensex, Nifty rebounded on Wednesday on the back of buying in blue-chips HDFC Bank and ICICI Bank and a firm trend in Asian peers.

The equity benchmark indices snapped a three-day losing streak on Wednesday, with strong buying in heavyweight financial stocks and positive cues from Asian markets lifting sentiment. However, analysts believe that the Nifty’s next big directional move will only come after the index breaks out of the 24,400–25,200 zone.

The Sensex jumped 410.19 points or 0.51 percent to close at 81,596.63. It touched an intraday high of 82,021.64, gaining 835.2 points. The broader NSE Nifty ended 129.55 points or 0.52 percent higher at 24,813.45.

Market participants said the Nifty formed a small bullish candle with a long upper shadow, indicating resistance at higher levels. The price action remained within the previous session’s range, signalling a pause or consolidation near the 24,800 mark.

Technical analysts see the index consolidating in the near term as it digests the recent sharp rally. "A decisive move will only emerge once the Nifty crosses either 25,200 on the upside or 24,400 on the downside," said analysts at Bajaj Broking.

They added that a move above Tuesday’s high of 24,946 could open the door for an upside extension towards 25,100–25,200 in coming sessions. On the other hand, a slide below the past two session lows near 24,669 may trigger a deeper correction towards 24,500–24,400.

"The zone of 24,350–24,400 will act as crucial short-term support, as it coincides with last week’s low, the 20-day exponential moving average, and the 61.8 percent Fibonacci retracement of the recent rally from 23,935 to 25,116," Bajaj Broking noted.

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, observed that the index formed a small candle with a long upper shadow on the daily chart, hinting at an attempted bounce.

"The Nifty is currently holding initial support at the 10-day EMA of 24,700. If this level is breached, the next cushion lies at 24,500. A move above 25,000 could trigger fresh buying interest, taking the index towards 25,250–25,500 levels," Shetti said.

On the Bank Nifty, the analysts at the Bajaj Broking, said "In the coming sessions a move above yesterday high (55,356) will open pullback towards 55,800-56,000 levels. Going ahead, overall we expect the index to extend the last 4 weeks' consolidation in the broad range of 56,000-53,500. In the last 19 sessions, it has retraced just 38.2% of the prior 9-session rally (49,157–56,098), indicating a shallow pullback that suggests underlying strength and potential higher bottom formation. Within the consolidation, we believe dips should be used as buying opportunities. Key support at 54,000-53,500 being the confluence of key retracement and 20 days EMA."