Pre-Market Commentary| NIFTY can extend towards the 23281–23350 zone

MUMBAI, 28 SEPTEMBER: The index has formed a small bullish candle following a strong bearish candle, indicating absorption of selling pressure and rejection of lower levels. The formation suggests near-term consolidation after previous session sharp decline.

The ongoing pullback recovery indicates a breather after the recent decline. As long as the index holds above Friday’s low of 23,020, the recovery can extend towards the 23,281–23,350 zone, which coincides with the Thursday gap-down area and is likely to act as immediate resistance.  A decisive breach below 23,020 would negate the recovery setup and resume the corrective move towards 22,800–22,700 in the coming sessions.

For a meaningful pullback, the index needs to establish a sustained Higher High–Higher Low formation and reclaim 23,350. A sustained move above this level can signal a pause in the correction and open the upside towards the major resistance zone of 23,500–23,600.

Key support is placed at 22,700–22,800, which coincides with the 80% retracement zone of the previous major up move from 22,183 to 24,774.

Bank Nifty: Key support is placed at 54,500–54,000 zone

The index has formed an Inverted Hammer candle on the daily chart, with price remaining within the previous day’s range, indicating consolidation after previous session sharp decline.

Bank Nifty sustaining below last Thursday gap down area of 56,200 will keep the bias down and open further downside towards 55,000 and 54,500 levels in the coming sessions.

Key support is placed at 54,500–54,000 zone being the confluence of the 80% retracement of the previous major up move from 52,784 to 58,706 and measuring implication of the recent consolidation range.

For a meaningful improvement in the trend structure, Bank Nifty needs to establish a sustained Higher High–Higher Low formation and reclaim the immediate hurdle at 56,200. A sustained move above this level can signal a pause in the correction and open the upside towards the major resistance zone of 56,800–57,000.

Report by:  Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking

(Disclaimer: The information provided here is investment advice only. Investing in the markets is subject to risks and please consult your advisor before investing)

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