The Nifty's short-term technical structure has improved after crossing the crucial resistance level of 22,800 and settling just below the psychological 23,000 mark on 15 October.
The breakout indicates an improvement in buying momentum and that the recent recovery is gaining traction. However, the question remains: will the momentum sustain?
According to Jigar S. Patel, Senior Manager of Equity Technical Research at Anand Rathi Share and Stock Brokers, a breakout above resistance is an encouraging technical development, but it does not necessarily confirm a complete trend reversal.
"The index must demonstrate its ability to sustain higher levels and absorb selling pressure near the next important resistance zone. Therefore, the focus now shifts towards the 23,000–23,150 range, which is expected to act as a significant hurdle for the ongoing recovery," said Patel.
Patel underscored a notable development in the movement of the hourly Relative Strength Index (RSI).