Nifty 50 faces resistance at THIS level next. How to trade in near term?

Indian equity benchmarks Sensex and Nifty shed early gains on Tuesday, amid profit booking and global trade concerns. Despite a positive opening, selling pressure in heavyweight stocks dragged the indices lower. Analysts remain cautiously optimistic, highlighting key technical levels to watch in the near term.

Profit Booking Drags Indices Lower

The BSE Sensex, which opened on a strong note, slipped 829.51 points or 1.06 percent from its intraday high, hitting a low of 77,880.84 by noon. The NSE Nifty also lost 242.05 points, ending at 23,627.55. The decline was driven by profit booking at higher levels and renewed concerns over global trade tariffs.

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, remarked that while market momentum still favours the bulls, the absence of strong fundamental support could limit further gains. “The uncertainty around trade tariffs is adding to caution, making it difficult for the market to sustain a prolonged rally,” he noted.

Caution Amid Global Uncertainty

Vinit Bolinjkar, Head of Research at Ventura, pointed out that external factors, including potential shifts in US monetary policy and ongoing geopolitical tensions, could introduce volatility. “While the market shows positive momentum, investors should remain cautious and factor in these external risks when making decisions,” he advised.

Ajit Mishra, SVP of Research at Religare Broking, highlighted that the recent market strength is primarily driven by renewed foreign institutional investor (FII) buying in the cash market and short-covering in the derivatives segment. He added that Nifty’s reclaiming of its 200-day DEMA reinforces positive sentiment, with broad-based sectoral buying likely to sustain the momentum.

Technical Outlook: Key Support and Resistance Levels

Osho Krishan, Senior Research Analyst at Angel One, identified the 23,500 zone as a key support level, backed by the 89-day DEMA and a recent bullish gap between 23,433 and 23,400. On the upside, he pegged the intermediate resistance at 23,800, near the swing high from February 25, followed by 24,100, which aligns with the 200-day DSMA.

Hrishikesh Yedve, AVP of Technical and Derivatives Research at Asit C. Mehta Investment Intermediates, echoed a similar view, placing immediate support at 23,510 (100-DSMA) and short-term resistance at 23,810. He advised traders to adopt a “buy on dips” strategy, while low-risk participants could consider booking profits around the 23,800 mark.

Aditya Gaggar, Director at Progressive Shares, pointed out that the Nifty’s formation of another bullish candle on the daily chart indicates an overbought zone. He projected immediate resistance at 23,800, with 23,400 serving as the key downside support. Gaggar noted that after the recent one-way rally, a pullback could offer a healthy correction.

As markets continue to face resistance at higher levels, analysts recommend a cautious yet opportunistic approach. With strong technical support around 23,500 and resistance near 23,800, traders are advised to adopt a “buy on dips” strategy while keeping trailing stop losses in place. External risks, including trade tariff uncertainties and global monetary policies, could trigger short-term volatility, making stock selection and disciplined profit-taking crucial in the coming sessions.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.