Tue. Sep 26th, 2023
    The Indian Equity Market Shows Signs of Consolidation before Next Uptrend

    The Indian equity market has been experiencing a consistent rally, leading many experts to anticipate a period of consolidation. If the current momentum continues, the immediate resistance for the Nifty50 is expected to be around the 20,200-20,300 level, which coincides with the breakout point of the upward-sloping resistance trendline. The next major resistance level is projected to be around 20,500, while 20,000 is seen as a crucial support level.

    On September 15, the market reached a new record high, with the Nifty50 surpassing the 20,200 mark for the first time. Positive global cues, reduced market volatility, and upward movements in the auto, banking, financial services, technology, and pharma sectors have contributed to this rally.

    The BSE Sensex rose by 320 points to 67,839, while the Nifty50 gained 89 points to reach 20,192. On the daily charts, a bullish candlestick pattern with a minor upper shadow was formed, indicating higher highs and higher lows for the second consecutive session.

    According to Rupak De, a senior technical analyst at LKP Securities, the market sentiment remains positive as long as the Nifty stays above the crucial 20,000 mark. In the short term, there is potential for the Nifty to move towards the 20,480-20,500 range on the upside.

    The broader markets also closed with moderate gains, with the Nifty Midcap 100 and Smallcap 100 indices climbing 0.3 percent and 0.4 percent respectively. Additionally, the decrease in India VIX, the fear index, by 3.66 percent to 10.9, is expected to provide comfort for bullish investors.

    In summary, the Indian equity market is likely to undergo a period of consolidation before the next significant move upwards. The Nifty50 is expected to face immediate resistance at 20,200-20,300 levels, followed by a major resistance at 20,500. As long as the Nifty remains above the key support level of 20,000, the overall market sentiment will remain positive.

    – Nifty50: An index comprised of the top 50 stocks listed on the National Stock Exchange of India (NSE).
    – BSE Sensex: The benchmark stock market index of the Bombay Stock Exchange (BSE), composed of 30 large companies representing various sectors of the Indian economy.
    – Candlestick pattern: A graphical representation of price movement in a particular time period, commonly used in technical analysis to determine market trends.

    – Rupak De, senior technical analyst at LKP Securities.
    – BSE Sensex and Nifty50 data.