Buy or sell: The week saw the Nifty consolidating within the 23,300-23,700 range, closing on a flat note. The key highlight was the Reserve Bank of India’s (RBI) monetary policy announcement under the new RBI Chief, Sanjay Malhotra. The Monetary Policy Committee (MPC) unanimously decided to reduce the policy repo rate by 25 basis points (bps) to 6.25%, marking the first rate cut in five years.
The Nifty commenced the week with a gap-up opening above the 23,300 resistance level and maintained an upward trajectory until reaching the next resistance zone of 23,600-23,700, closing at 23,560. Despite the positive news of a rate cut, the index witnessed profit booking towards the end of the week.
Looking ahead, if the Nifty surpasses the 23,700 mark, the rally could extend towards the 24,100-24,200 zone, aligning with the 200-day moving average (DMA) and the previous month’s high. Conversely, a close below 23,300 with a daily lower-high pattern could drag the index down to the next support levels at 22,500–22,800. Traders are advised to remain cautious and monitor these critical levels closely.
From a technical perspective, key levels to watch include 23,600 and 24,200, with the 200-DMA positioned at 24,100. The Nifty continues to trade within a falling channel pattern that originated in September 2024, with a crucial resistance level at 23,700. A weekly and monthly close above this threshold is necessary to bolster investor confidence. Notably, the last three trading sessions have seen the formation of a daily lower-high closing pattern, which is bearish in nature.
Bank Nifty Performance
The Bank Nifty Index started the week on a strong note, forming a weekly double-bottom pattern. This technical setup enabled the index to breach the previous week’s high of 50,200 and attempt a move towards the key resistance level of 50,500. However, it failed to sustain above this resistance zone. On a weekly basis, the index remained range-bound between 47,500 and 50,500.
Conclusion
Both Nifty and Bank Nifty closed below their respective monthly resistance zones. The 24,250 level for Nifty and the 50,500 level for Bank Nifty remain crucial for initiating fresh long positions. A sustained close below these levels could signal increased downside risk. Investors and traders should exercise caution and closely monitor these pivotal levels to gauge future market direction.
Weekly Stocks
Buy ITC at ₹430; Stop Loss at ₹460; Target Price of ₹415.
Buy Marico at ₹650; Stop Loss at ₹685; Target Price of ₹635.
Buy Sonata Software at ₹766; Stop Loss at ₹745; Target Price of ₹790.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
