Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities
The benchmark index Nifty witnessed a sharp rebound on Monday after comments from US Ambassador to India, Sergio Gor, regarding ongoing trade talks boosted investor sentiment. From its intraday low, the index surged more than 300 points and closed at 25790, up 0.42%. This recovery resulted in the formation of a bullish candle with a long lower shadow, indicating strong buying interest at lower levels. Significantly, Nifty managed to close above its 100-day EMA, a key technical level. The daily RSI also bounced from the 40–39 zone, though it remains below its 9-day average, suggesting improving momentum but not yet a full reversal.
Among Nifty constituents, Coal India and Tata Steel were the top gainers, while Infosys and Bajaj Finance ended as major losers. Sectorally, Nifty Metal and Nifty PSU Bank led the gains, whereas Nifty Media and Nifty Realty were the worst performers.
In the broader market, Nifty Midcap 100 and Nifty Smallcap 100 also recovered from lower levels during the session but closed in negative territory. Notably, Nifty Smallcap 100 continues to trade below all its crucial moving averages. The advance-decline ratio remained skewed towards decliners, with 306 stocks from the Nifty 500 universe ending in the red.
Nifty View
Going forward, the Nifty faces a crucial hurdle at the 50-day EMA zone of 25890–25920. A sustained move above 25920 could open the door for a sharp upside rally, with potential targets at 26100 and beyond in the near term. On the downside, immediate support is placed around the 100-day EMA zone of 25650–25620, which will be a key level for traders to watch.
Bank Nifty View
The banking benchmark index, Bank Nifty, found strong support near its 50-day EMA and staged an impressive rebound during the session. The index formed a bullish candle with a long lower shadow, signalling renewed buying interest at this crucial technical level. This recovery highlights the significance of the 50-day EMA as a key support zone for traders.
Going ahead, the zone of 59700–59800 will act as a critical hurdle for the index. A decisive and sustained move above 59800 could trigger a sharp upside rally, potentially taking the index towards 60300 and subsequently 60800 in the short term. On the downside, immediate support is placed in the 59000–58900 zone.