Nifty Surpasses 22,500 Mark Amid Market Volatility on October 9
The Nifty 50 index rebounded to 22,500, driven by IT stock purchases and lower crude prices, but analysts caution about market sustainability.
Nifty 50 closed at 22,485.35, up 1.14% on October 9.
Analysts suggest potential resistance at 22,600 and support around 22,200.
Market sentiment remains cautious with high volatility expected.
On October 9, the Nifty 50 index regained the crucial 22,500 level, closing at 22,485.35, reflecting a 1.14% increase. This recovery was attributed to renewed buying interest in IT stocks, alongside easing crude oil prices, which contributed to a more favorable trading environment after a significant selloff in the previous session.
Prior to this rebound, both the Nifty and BSE Sensex had experienced sharp declines, reaching 18-month and 32-month lows, respectively. The market's downturn had raised concerns among investors, prompting a cautious approach. Analysts are now closely monitoring whether this uptick is merely a technical bounce or if it can sustain momentum in the short term.
Pabitro Mukherjee, Deputy Vice President of Research at Bajaj Broking, indicated that a failure to maintain levels above 22,180 could lead to further declines towards 22,000 and the year-end low of 21,750. He noted that the immediate resistance is set at 22,600, while consolidation is expected within the range of 22,180 to 22,600. Gaurav Udani, founder of Thincredblu Securities, echoed this sentiment, emphasizing the need for sustained movement above 22,500 to improve market sentiment and trigger short-covering.
Market analysts have highlighted key support and resistance levels for traders. Immediate support is identified at 22,200 and 22,150, with a decisive break below these levels potentially accelerating selling pressure. Conversely, resistance is noted between 22,300 and 22,400, with a sustained move above this range possibly leading to a quick recovery towards 22,500. Shrikant Chouhan, Head of Equity Research at Kotak Neo, warned that a breach of critical support levels could initiate another wave of selling, impacting both the Nifty and Sensex.
Looking ahead, traders are advised to remain cautious and avoid chasing the opening gap due to anticipated volatility. The market's direction will largely depend on how it reacts around these pivotal levels. Analysts will continue to monitor the situation closely as the trading week progresses, assessing whether the current recovery can translate into a more stable market environment.
