Technical View | Nifty hits fresh record high but fails to sustain above crucial 19,500 mark for 5th time

Stock Market

The Nifty50 hit a fresh record high on July 13 backed by a rally in technology stocks and positive global peers on falling US inflation, but failed to sustain above the crucial 19,500 mark for the fifth time in the last six days due to selling pressure at higher levels. Finally, the index closed off the day's high.

The index opened higher by more than 100 points at 19,495 and hit a fresh intraday all-time high of 19,567, but saw some profit-taking at higher levels in the last couple of hours of the session and went closer to the previous day's closing levels by hitting a day's low of 19,386. However, the index showed a bit of recovery in late trade and settled at 19,414, up 30 points, forming a bearish candlestick pattern on the daily charts.

Technically, the index tested the upward-sloping resistance trendline adjoining highs of December 1 last year and July 7 this year, but could not sustain there. Hence, unless and until it gives a close above 19,500, the fresh upward sustainable rally towards 19,600-19,800 levels is unlikely, till then it may remain in the range of 19,300-19,500 levels, experts said.

"Technically, today's candlestick pattern indicates a lack of strength in the market to sustain the new highs. We observe rangebound action in the market around 19,500-19,300 levels in the last week and the sideways movement is expected to continue for the short term," Nagaraj Shetti, technical research analyst at HDFC Securities said.

He feels any weakness below the immediate support of 19,300 could drag the Nifty down to 19,200-19,100 levels in the near term. A decisive upside above 19,550 is likely to bring more upside for the short term, he said.

On the weekly Options data front, the maximum Call open interest was seen at 19,600 strike, followed by 19,500 strike, with Call writing at 19,600 strike, then 19,900 strike, whereas we have maximum Put open interest at 19,400 strike, followed by 19,300 strike, with Put writing at 19,400 strike, then 18,500 strike.

The above data indicated that 19,400 can be immediate support for the Nifty50, while 19,600 is expected to be immediate resistance.

Bank Nifty

The Bank Nifty also started off the day on a strong note, opening above the 45,000 mark but could not sustain the same optimism in the later part of the session, when the bears started dominating. It means the index was unable to sustain above the 45,000 mark and closed with just 26 points gains at 44,665.

The index has formed a bearish candlestick pattern on the daily charts but negated lower highs and lower lows of the previous six consecutive sessions.

"If the bulls want to stage a comeback, the support level (44,500 – 44,400) would ideally be the pivotal point. However, if breached, we may witness further price correction in the near term, potentially reaching levels below 44,000," Rajesh Bhosale, Technical Analyst at Angel One said.

On the other hand, he feels there is a cluster of resistance around today's high of 45,200, and the bulls must surpass this level on a sustained basis to regain momentum, potentially driving prices towards the all-time high levels of 45,655 and beyond.

The broader markets underperformed frontliners as the breadth was in favour of bears in a 2:1 ratio. The Nifty Midcap 100 and Smallcap 100 indices fell 0.8 percent and 1 percent, respectively.

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