On October 26, the Nifty 50 rose 153 points, or 0.68 percent, to close at 22,753, while the Bank Nifty gained 79 points, or 0.15 percent, to settle at 54,367. Market breadth turned positive on the NSE, with 1,867 shares advancing against 1,407 declining.
Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI Securities
Nifty witnessed a recovery on Monday after declining for four consecutive sessions. The index recovered from its intraday lows, indicating buying interest at lower levels; however, one session of positive movement is not sufficient to confirm a reversal in the prevailing corrective trend. The broader market remains sensitive to elevated crude oil prices, geopolitical uncertainty and the upcoming US Federal Reserve policy decision. These factors, along with the ongoing corporate earnings season, are likely to keep volatility elevated.
From a technical perspective, the 22,500–22,400 zone will be an important support area, as a sustained breach could expose the index to further downside towards 22,200 and 22,000. On the upside, 22,900–23,000 is the immediate resistance zone, followed by 23,200. The index needs to reclaim and sustain above 23,000 to improve the near-term technical outlook and create the possibility of a recovery towards higher levels. Until then, rallies could encounter selling pressure.
Given the sharp correction in recent sessions, a short-covering bounce cannot be ruled out, particularly if global cues improve and heavyweight stocks participate in the recovery. However, traders should avoid interpreting such a bounce as a durable trend reversal without confirmation from price action.