Technical View: Nifty extends gains, closes above 23,200; expect rangebound action

Market Today

The Nifty50 index ended higher on the second consecutive session on January 23 amid buying across the sectors barring oil & gas, financials.

The index opened lower but erased the losses in the initial hours and extended the gains as the day progressed to move above 23,250. However, mild profit booking erased some of the intraday gains but the index managed to close comfortably above 23,200.

UltraTech Cement, Grasim Industries, Wipro, Shriram Finance, Eicher Motors wereamong the top gainers on the Nifty, while losers were BPCL, Kotak Mahindra Bank, HCL Technologies, Power Grid Corp, Reliance Industries.

Nifty Midcap index rose nearly 2 percent and smallcap index was up 1 percent.

Among sectors, auto, consumer durables, IT, media, pharma realty up 1-2 percent. On the other hand, oil & gas and Private bank indices ended in the red.

"Nifty witnessed a stable day of trade today. It opened marginally in the negative, however recovered and managed to close in the green up ~50 points. On the daily charts, we can observe that the Nifty is trading in the range of 23,420 – 23,000 since the last three sessions. Bollinger bands are contracting indicating rangebound price action going ahead. A breach of the range on either side shall set the trend in that direction," said Jatin Gedia – Technical Research Analyst at Mirae Asset Sharekhan.

"Daily and hourly momentum indicators have a positive crossover which is a buy signal, however, prices are not showing corresponding strength. Thus, a decisive range breakout is required for a move to develop until then the rangebound price action is likely to continue," he added.

In the rangebound session, the Bank Nifty index ended with marginal losses at 48,589.