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The new Samvat 2083 began on a positive note, although buyers failed to sustain the higher levels following a gap-up opening. After a mid-week holiday, the gap-up trend continued; however, this time, sellers managed to gain the upper hand. Prices came under sustained selling pressure shortly after the opening bell, eventually erasing the entire opening gap and dragging the index lower. Nevertheless, the index managed to hold on to modest gains, eventually settling at 25255, up 0.84% for the session.

Following a sharp 3000-point rally over the past two weeks, which has resulted in a complete retracement of more than 100% of the preceding downswing, bulls appear to have taken firm control of the frontline index, NIFTY. The underlying strength is also evident in the equally impressive recovery witnessed across its constituent stocks, reflecting broad-based buying interest. That said, the sharp and relentless upmove has pushed nearly all technical and market-breadth indicators into overbought territory, suggesting that the rally may be approaching a short-term point of exhaustion. Adding to this caution is the possible formation of an exhaustion gap on the upside during today's session, with prices subsequently filling the opening gap. This price action could indicate that buyers are beginning to lose some momentum in the immediate term. The P&F charts offer further evidence of a potential near-term exhaustion, with the current running column extending to 110 boxes, its longest reading on record. Nevertheless, the broader trend across all timeframes is now firmly aligned to the upside, reinforcing the improving technical outlook. Going forward, while the underlying trend remains bullish, the possibility of a short-term consolidation or corrective decline cannot be ruled out. Consequently, participants would be well advised to avoid chasing the ongoing momentum and instead consider initiating fresh long positions on dips towards well-defined support zones, where the risk-reward proposition is more favourable.

In terms of levels the 25100-25050 band is an immediate support, followed by a stronger support in the 24850-24750 band. On the flipside, 25250-25300 is likely to act as immediate hurdle, followed by a stronger hurdle in the 25450-25500 zone.

Key levels to watch

NIFTY

Support: 25100- 25050

Resistance: 25250- 25300

BANKNIFTY

Support: 60500– 60400

Resistance: 60900– 61450

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