The improvement in momentum indicators and the decisive move above short-term moving averages boosted market sentiment. However, the sustainability of the recovery remains key to watch going forward, while elevated oil prices are likely to cap the market's upside. In terms of key levels, the Nifty 50 needs to defend 22,800 to extend its upmove towards 23,000–23,200. A break below 22,800 could see the index find support at 22,650, followed by 22,400, which remains a crucial support level. Meanwhile, the Bank Nifty needs to hold 54,500 as support, with 54,000 being the next level to watch in case of a breakdown. On the upside, a decisive move above 55,000 is essential for the index to extend its rally towards the 55,700–56,100 resistance zone, according to experts.
On October 29, the Nifty 50 rallied 238 points, or 1.05 percent, to close at 22,937, while the Bank Nifty surged 642 points, or 1.18 percent, to 54,910. Market breadth remained in favour of the bulls, with 2,000 shares advancing against 1,272 declining shares on the NSE.
After consolidating in the 22,300–22,800 range for nearly five sessions, Nifty has broken out above the upper end of this range and cleared the 22,800 resistance in the latest session. Price has reclaimed the 20-day EMA. Momentum indicators are improving and moving toward the positive zone.
The recent consolidation occurred near the retest zone of a prior falling wedge breakout that took place earlier this month (the wedge breakout had initially pushed the index up to 23,175 before the retracement). Overall short term bias remains positive.
Immediate upside targets are 23,195, followed by 23,500 if positive momentum continue above 23,200. Support is placed at 22,650, with the next levels at 22,500–22,400.