In the last truncated week, the benchmark indices witnessed a pullback rally. The Nifty ended up by 1.1 percent, whereas the Sensex gained 748 points. Among sectors, almost all the major sectoral indices traded in positive territory, but the Pharma and Healthcare indices outperformed, both rallied over 3 percent. Meanwhile, profit booking was seen in selective FMCG and Consumer stocks.
Technically, on daily and intraday charts, the market has formed reversal patterns, which are largely positive. Additionally, a bullish candle was formed on the weekly charts, indicating the continuation of the pullback in the near future.
We believe that 24,500/80300 will act as a key support zone for short-term traders. As long as the market trades above this level, the bullish sentiment is likely to continue. On the higher side, 24,700/80900 would be the immediate resistance zone for the bulls. A successful breakout above 24,700/80900 could push the market towards 24,900-25,000/81500-81800.
However, below 24,500/80300, market sentiment could turn negative. The index could then retest levels around 24,350/79800. Further downside may also continue, potentially dragging the index to 24,200-24,150/79300-79100.
For Bank Nifty, after a long correction, it is witnessing range-bound activity. On the upside, above 55,700, it could rally towards the 20-day Simple Moving Average (SMA), around 56,000 and 56,300. On the downside, below 55,000, selling pressure is likely to accelerate. If that level is breached, the index could slip towards 54,500-54,200.