Trade Setup For Oct 17: Nifty Breakout Signals Bullish Trend

The NSE Nifty 50 has broken above the September swing high and it will likely test the calendar-year high of 25,700 with last month’s swing high of 25,450 as the support, according to analysts. This breakout signals that the bulls are back in command and potentially setting the stage for a strong performance in the near term.

Nifty Technical Analysis

After more than a year of consolidation, the breakout signals that the bulls are back in command and potentially setting the stage for a strong performance in the near term, according to equity technical analysis experts. The daily chart indicates that Nifty has formed a strong bullish candle with a higher high and higher low, signalling continuation of the positive momentum, said Bajaj Broking.

Market Outlook

The short-term market texture is bullish and there can be range-bound activity in near future due to temporary overbought conditions, according to Shrikant Chouhan, head of equity research at Kotak Securities. The Bank Nifty is also signaling an upward hike, according to Bajaj Broking.

Support and Resistance Levels

The earlier resistance near the Sept. 18 swing high of 25,470 has now turned into support, followed by 25,330, said Ponmudi R, CEO of Enrich Money. The Nifty ended in the green for the second consecutive session on Thursday. At the close, the Sensex rose 862.23 points, or 1.04%, to 83,467.66, while the Nifty rose 261.75 points, or 1.03%, to 25,585.30.

Broader Market Trends

Indian markets witnessed a broad-based rally on Thursday, led by rate-sensitive sectors such as realty, auto, and banking, after minutes from the RBI’s recent monetary policy meeting signaled room for further rate cuts amid a sharp fall in both headline and core inflation, said Ponmudi R.

Currency Market Update

Rising for the second straight session, the rupee surged 21 paise to close at 87.87 (provisional) against the US dollar on Thursday, buoyed by a softer American currency against major currencies and renewed risk-on sentiment among investors.

Investment Strategies

Investors can consider a long-term investment strategy in the Indian stock market, given the positive trend and potential for further growth. However, it’s essential to conduct thorough technical analysis and fundamental analysis before making any investment decisions.