Bullishness in Nifty After the Gap-Down! - Post-Market Analysis
NIFTY started the day at 19,351 with a gap-down of 43 points. The index initially consolidated and then started moving up— making higher lows till yesterday’s closing levels of 19,400. Then, it made a minor retracement and an even stronger up-move of 75 points after 3 PM. Nifty closed at 19,425, up by 30 points or 0.15%.
BANK NIFTY (BNF) started the day at 43,542 with a gap-down of 140 points. Right after opening, the index rose till yesterday’s closing levels and took rejection at 43,700 levels. Then, it fell a bit and later moved back up after 3 PM (crossing the day’s high). BNF closed at 43,829, up by 136 points or 0.31%.
All indices except Nifty Media (-1.23%), Nifty Auto (-0.42%), and Nifty IT (-0.26%) closed in the green.
Major Asian markets closed in the red. European markets are currently trading up to 1.3% in the green.
NTPC (+2.02%) was NIFTY50’s top gainer, following the positive momentum observed in power sector stocks.
Network18 Media (+7.37%) surged on the back of strong volumes.
Shares of Engineers India (6.54%) jumped after its Q2 profit beat analyst estimates.
Hero MotoCorp (-2.16%) was NIFTY50’s top loser. The Enforcement Directorate (ED) has attached assets worth ₹24.95 crore of the company’s executive chairperson Pawan Kant Munjal as part of a money laundering investigation against him.
ZEEL (-5.29%) fell sharply after the company recorded a 5% YoY decline in consolidated net profit to ₹130 crore in Q2 amid pressure on ad revenue.
The festive Diwali spirit seems to be lifting the markets. Despite a gap-down, there was strong buying in Nifty and BNF today. Both indices kept rising, showing considerable strength. However, it's important to note that major indices are currently at their respective resistance levels. They need to breach those levels for a continued up-move.
Nifty: The index is currently facing a significant resistance around 19,460 levels. If it successfully breaks out from there, we might see Nifty climb to 19,500 initially and potentially reach 19,560 levels later. Meanwhile, the index could take support at 19,400 levels (the earlier resistance now acting as support). If it falls below this point, the targets on the downside could be 19,350 and 19,300 levels.
On a daily time frame, Nifty is currently close to the breakdown levels and undergoing a re-test. An important Fibonacci retracement level of 50% is located around 19,520 levels. To confirm a bullish trend, the index needs to surpass this level.
Bank Nifty: The major resistance for the index is 43,900 levels. If it manages to break out, we could see the index reaching 44,000 first and 44,500 next. On the other hand, the immediate support to keep an eye on is around 43,700 levels (the previous resistance may now act as support). If the index falls below 43,800 (the previous swing), it might fall to 43,700 and 43,500 levels.
On a daily timeframe, BNF faces a crucial resistance point that aligns with both the breakdown levels and the 33% Fibonacci retracement levels. To confirm a change in trend, the index needs to cross the 44,000 mark.
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