With the resumption of the higher high-higher low formation, back-to-back strong gap-up openings and sustained bullish momentum, the overall market sentiment is expected to remain buoyant in the coming sessions. However, after the recent stellar one-way rally, the possibility of minor consolidation cannot be ruled out. The Nifty 50 needs to defend the 23,800–23,700 zone to sustain its upward momentum towards 24,000–24,200. On the downside, the 23,600–23,500 zone is expected to act as a crucial support area. Meanwhile, as long as the Bank Nifty sustains above Tuesday's low, the upmove towards 56,000–56,100 cannot be ruled out, even amid some consolidation. However, a breach of this level could expose the index to further downside towards the 55,000-54,600 support zone, experts said.
On November 3, the Nifty 50 rallied 370 points, or 1.58 percent, to close at 23,811, while the Bank Nifty jumped 538 points, or 0.98 percent, to 55,540. Market breadth remained firmly in favour of the bulls, with 1,928 stocks advancing against 1,379 declining stocks on the NSE.
Rajesh Dashrath Bhosale, Fund Manager - Advisory at Renaissance
The last four trading sessions have been remarkable for the Nifty, with a near-vertical rally taking the index above all its key short- and medium-term moving averages, including the 20-, 50- and 89-day EMAs, in quick succession. This sharp rally has also established a higher-high, higher-low structure on the daily chart, signalling a structural shift towards a bullish trend. The RSI has moved above 60, further confirming the improvement in momentum.
The next key resistance is placed at the 200-day SMA, around 24,000. A sustained move above this level could fuel further gains towards 24,350. On the downside, 23,500 remains the key support.