After facing selling pressure near the 23,500 level on Tuesday, the Nifty 50 staged a recovery on Wednesday. The index gained nearly 118 points and settled close to the 23,450 mark, recording its highest close in nearly two weeks.
The index opened on a positive note but witnessed volatility during the first hour of trade. Importantly, it managed to hold the early-session low and gradually moved higher as the session progressed. The Nifty touched an intraday high of 23,466.90 before ending the day within striking distance of 23,450.
Inside candle formation keeps 23,489 in focus
Wednesday’s price action resulted in the formation of a bullish candle. However, the entire trading range remained within Tuesday’s bearish engulfing candle, resulting in an inside candle formation.
The absence of follow-up selling after Tuesday’s bearish setup is a positive development. The index also reclaimed its 8-DEMA after slipping below this short-term moving average in the previous session.
However, the bearish engulfing pattern has not yet been negated. For that to happen, the Nifty needs to move above Tuesday’s high of 23,489. A sustained move above this level could strengthen the recovery and pave the way for a test of 23,600.
Why 23,600 matters
The 23,600 level remains an important resistance zone based on the change-in-polarity principle, where an earlier support area can act as resistance after a breakdown. A decisive move above 23,600 would indicate a stronger shift in short-term momentum and could attract fresh buying interest.
Until then, the 23,489–23,600 zone is likely to remain the key hurdle for the index.
Support placed at 23,350–23,285
On the downside, immediate support is placed at 23,350, followed by 23,285. As long as the Nifty holds above this support zone, the possibility of a move towards 23,600 remains open
A break below 23,285, however, would weaken the recovery and could drag the index back towards the lower end of the large bearish candle formed on September 15.
Nifty outlook for September 24
The near-term setup has improved following Wednesday’s rebound, but the Nifty still needs to cross the 23,489–23,600 resistance zone to confirm stronger upside momentum. Until that happens, the index may remain range-bound, with 23,285–23,350 acting as support and 23,489–23,600 as resistance.
Stock to Watch: GNA Axles
GNA Axles witnessed a rally of nearly 75% from its June lows to the high recorded on July 16. Thereafter, the stock entered a counter-trend corrective phase. Recently, it registered a decisive breakout from a two-month consolidation, which had taken the shape of a triangular pattern. This breakout signals a potential resumption of the uptrend and offers a fresh entry opportunity.
Importantly, the corrective phase remained relatively shallow, with the stock retracing less than 50% of the preceding sharp 26-session upmove, highlighting a robust price structure. The recent breakout was also accompanied by strong volumes, adding credibility to the move.
On the technical front, the stock is trading above all its key short-, medium-, and long-term moving averages on the daily time frame. The 14-period daily RSI has moved into bullish territory, indicating strengthening momentum. Meanwhile, the daily MACD has generated a bullish crossover, further validating the positive bias.
Considering the above factors, the stock sustaining above the ₹600 level would keep the outlook positive. On the upside, it could test the ₹635– ₹655 zone. Traders may maintain a stop-loss at ₹562.
