Nifty’s Next Big Test: Can It Cross This Level To Claim A New All-Time High?
The benchmark Nifty 50 index traded with a positive bias throughout the week, ending higher in four out of five trading sessions. Notably, on Friday, the index witnessed a follow-through buying and closed above the ‘Shooting Star’ candlestick pattern formed on Oct. 7, thereby negating its earlier bearish implications.
Weekly Market Recap
On Friday, the index opened on a firm note and moved higher during the early session. However, it later turned range-bound with stock-specific action dominating trade. Eventually, Nifty 50 settled at 25,285.35, up 103.55 points or 0.41%.
Technical Analysis
On the daily chart, the index formed a bullish candle with a higher high and higher low compared with the previous session. As highlighted earlier, the bulls successfully invalidated the bearish signal of the Shooting Star by closing decisively above the 25,220 level.
From a pattern perspective, Nifty continues to oscillate within a long-standing symmetrical triangle formation, bounded by converging trendlines. Historically, such formations often lead to strong directional moves upon breakout. The index also remains comfortably above all key moving averages i.e. 20-, 50-, 100-, and 200-DMA, reinforcing a bullish undertone.
That said, the narrowing range and flattening Bollinger Bands on the weekly chart suggest that a major move could be imminent. Directional clarity will emerge only after a confirmed breakout on either side of the triangle.
Key Levels to Watch
On the upside, the breakout level is placed around 25,400; a decisive move above this resistance zone, supported by strong volumes and broad market participation, will confirm a fresh leg higher. If confirmed, the medium-term target from the pattern stands near 26,267. For the near term, resistance is seen at 25,400 followed by 25,550–25,600, while the 20-DMA, currently around 25,058, is likely to act as strong support.
From a technical standpoint, no clear bearish signals are visible so far. However, a close below Friday’s low of 25,156 would turn sentiment negative, and a breach below the 20-DMA could mark the end of the current upswing.
Momentum indicators continue to paint a positive picture. The daily MACD remains in an uptrend and is diverging positively from its nine-period average, validating the bullish bias. Meanwhile, the 14-period RSI has crossed its prior swing high and entered bullish territory.
Investment Strategies
Overall, the index ticks all the boxes of a bullish setup. While global developments may influence the opening tone on Monday, it is crucial for Nifty to hold above Friday’s low of 25,156 and sustain above the 20-DMA. Holding these levels will strengthen the case for an eventual breakout from the symmetrical triangle formation.
Investors can consider long term investing strategies and short term trading strategies to capitalize on the potential upside. Additionally, technical analysis for beginners can help new investors understand the market trends and make informed decisions.
Conclusion
In conclusion, the Nifty 50 index is poised for a major test as it attempts to cross a crucial level and claim a new all-time high. Investors should keep a close eye on the key levels and market trends to make informed decisions. With the right investment strategies for Indian market, investors can navigate the market fluctuations and achieve their financial goals.
