The Nifty index ended last week on a high note, closing with a notable 3.37% upside. The market witnessed significant volatility, largely influenced by the election exit polls and the subsequent results. Initially, Nifty opened higher but then sharply declined to a low of 21,281 before experiencing a robust recovery, closing the week at 23,290.
Weekly Technical Analysis
From a technical perspective, Nifty has formed some promising patterns. According to the trendline analysis, Nifty is expected to encounter its next upside hurdle around the 23,350 – 23,400 levels. Should it fail to break and sustain above this range with substantial volume, we may see a downward trend, with Nifty potentially drifting back towards the 22,800 – 22,500 levels on a weekly basis.
Bank Nifty Insights
Similarly, Bank Nifty has been closely following its trendline. If it fails to hold above its critical resistance level of 50,000, we could witness selling pressure pushing the index down to the 49,500 – 49,000 levels weekly. Despite this, there remains a potential for fresh buying interest, particularly on corrective dips.
Strategic Outlook
Given the current market dynamics, we recommend a cautious approach for those holding long positions. While there is an opportunity to buy on dips, especially in Bank Nifty, it is essential to stay vigilant and closely monitor the market movements. Ensure that any long positions are well-supported by volume and follow the trendline indicators for optimal decision-making.
In summary, while the Nifty has shown resilience and a positive closing last week, the market’s future direction will heavily depend on its ability to overcome key resistance levels. Investors should stay cautious, looking for strategic buying opportunities during market corrections.
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