Nifty reclaims its 200-DMA, recovering from a sharp dip to 23,350, while INDIA VIX cools off. Key contributors HDFC Bank, Hindalco, and M&M drive gains.
A Volatile Start Ends on a Resilient Note
The NSE benchmark Nifty50 index opened strong above the 23,600 mark but quickly slipped, hitting an intraday low of 23,350.40. However, buying support emerged at lower levels, helping the index reclaim 23,500 by the end of the session. The INDIA VIX, a measure of market volatility, cooled significantly from its day’s high, reflecting a calming sentiment as the session progressed.
Key Contributors to Nifty’s Resilience
The recovery was driven by significant contributions from HDFC Bank, Hindalco, and M&M, which collectively added approximately 51 points to the index.
Technical Insights: Reclaims 200-DMA
- Thursday’s Close: Nifty settled below both the 200-day exponential moving average (EMA) and the 200-day moving average (DMA). The daily trading range narrowed to 190 points, with volumes tapering off. On Monday, the index reclaimed its 200-DMA.
- Candlestick Pattern: A long upper shadow Doji candle formed, signaling that bears maintained control despite intraday rebounds. This pattern, combined with the narrowing range, hints at a potential pause in the ongoing downtrend.
Weekly Perspective: Testing Critical Support Levels
On the weekly chart:
- The index is approaching the 50-week moving average at 23,254, just 1.20% away from its current position.
- Nifty has dropped over 4% in the past six days, with declines reflecting a pattern of sharp drops followed by brief consolidations.
The current phase mirrors previous cycles, suggesting a possible two-day consolidation before further directional moves.
Key Support and Resistance Levels
- Support: Immediate support lies at 23,253, aligning with the 61.8% Fibonacci retracement level and the 50-week moving average.
- Resistance: On the upside, the 23,890–23,920 zone presents immediate resistance, limiting the scope for a sharp recovery without sustained buying momentum.
RSI Indicates Oversold Levels
- Daily RSI: At 29.38, the index has entered the oversold zone, implying a potential near-term easing of the decline.
- Weekly RSI: At 43.07, it remains just above bearish territory, signaling caution.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
