Nifty broke out above 24,200 after a long period of consolidation. Meanwhile, the India VIX fell to its lowest level in nearly five months. Momentum indicators also improved on Friday.
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This week was a good one for the stock market. On July 3rd, the market’s major indices, Nifty and Sensex, closed higher for the third consecutive day. However, the Bank Nifty and Midcap indexes showed weakness. Experts say market sentiment has improved. The question is: will Nifty surpass the 24,600 level next week?
Breakout above 24200 after a long consolidation
Nifty has broken out above 24,200 after a prolonged consolidation. Meanwhile, the India VIX has fallen to its lowest level in nearly five months. Momentum indicators also improved on Friday. However, in the short term, Nifty faces resistance at the 24,400 level, which is also its 200-day EMA. If Nifty breaks this resistance, it will face resistance at 24,600.
Profit-booking in the final hours of trading reduced gains.
On Friday, the Nifty opened 200 points higher. However, profit-booking was seen in the final hours of trading. Despite reaching 24,376 in the morning, the Nifty fell below the 24,300 level. It finally closed at 24,271. On the daily chart, the Nifty formed a bearish candle. However, a bullish gap remains. Technically, this indicates a lack of strength for an upside breakout above the resistance level.
Signs of bulls gradually gaining strength
The RSI has reclaimed the 60 level. A bullish crossover has reached 60.95, indicating a gradual improvement in bullish momentum. Furthermore, the DI+ on the ADX indicator has crossed the DI-, indicating that bulls are gradually gaining strength over bears. The MACD histogram is also indicating strength, as the number of green bars is increasing.
Nifty jumped 215 points this week
This week, the Nifty has gained 215 points, or 0.89%. After forming a doji-like formation over the past two weeks, the Nifty has formed a long bullish candle with shadows on both sides. This indicates that the market’s consolidation phase may soon end. Following this, the Nifty could regain upside momentum. Therefore, the target of 24,600 will be in focus next week. The next support is at 24,050.
Bank Nifty underperforms Nifty 50
Bank Nifty underperformed the Nifty 50. It fell 93 points on Friday to close at 57,938. However, it remains above all major moving averages, indicating a positive overall structure. However, further consolidation is possible. It has formed a bearish candle on the daily chart. Bank Nifty faced resistance in the 58,400-58,500 zone. Breaking this level could propel it towards 58,900. In case of a decline, it will find support in the 57,500-57,400 zone.
Disclaimer: The views expressed by experts on Moneycontrol are their own. They do not reflect the views of the website or its management. Moneycontrol users are advised to consult certified experts before making any investment decisions.
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