Nifty: Bullish sentiment will continue as long as 24,500 holds; experts recommend a "buy on dips" strategy
Nifty technical view: Bullish sentiment as long as 24,500 holds
The Nifty 50 index remained range-bound on December 10, 2024, continuing its downtrend for the third consecutive day but showing some resilience. The key support level for Nifty is 24,500, and the resistance is at 24,700, with a subsequent resistance at 24,800. A breakout from this range in either direction could provide further direction to the market.
Despite a negative bias, Nifty showed a recovery in late trading, closing at 24,610, just 9 points lower. A bullish candlestick pattern with a long lower shadow resembling a Bullish Hammer formed on the daily chart, indicating buying interest at lower levels. Experts recommend a "buy on dips" strategy, suggesting that the near-term uptrend remains intact.
For the next potential upside, Nifty’s resistance levels are 24,850-24,900, while the immediate support remains at 24,500. If the index moves beyond 24,800, the 25,000 mark is a possible target.
Options Data and Market Sentiment:
The maximum open interest on call options is at the 25,000 strike, followed by 25,500 and 24,700, indicating market participants expect resistance near these levels. On the put side, the 24,000 strike holds the highest open interest, followed by 24,300 and 24,500, with maximum put writing at 24,300.
This suggests that in the short term, Nifty may stay within the 24,000-25,000 range, with the immediate focus on the 24,500-24,700 levels.
Bank Nifty Performance:
Bank Nifty saw a rise of 170 points, closing at 53,578, outpacing the Nifty 50 index. However, the index continued to form lower highs. Momentum indicators like the RSI and MACD indicate an upward bias. Support is now at the 53,300 zone, with potential for an upmove towards 54,000 and the previous lifetime high of 54,467.
India VIX Decline:
The India VIX, a key measure of market volatility, dropped to its lowest level in over seven weeks, closing below 14 at 13.78. This decline in volatility is favorable for the bulls, suggesting lower market uncertainty and a more stable environment for upward momentum.
As long as Nifty holds the 24,500 support, the bullish sentiment remains intact. Traders should watch for a breakout from the 24,500-24,700 range for further market direction.
Disclaimer: Please seek advice from a certified expert before making any investment decisions.
