Nifty stages recovery from lows; Can bulls push the index back above 24,000?

The Nifty 50 began Wednesday’s session with a gap down below the crucial psychological mark of 24,000. After remaining largely confined to the range formed during the first hour of trade, the index witnessed further weakness before finding buying support at lower levels.

From the intraday low, the index recovered 127.65 points and closed at 23,914.45. However, the index failed to fill the opening gap and ended the session below the 24,000 mark, keeping the short-term outlook cautious.

Nifty Finds Support Near Important Technical Confluence

The day’s trading activity led to the formation of a green-bodied candle with a lower shadow. The lower shadow highlights buying interest emerging from lower levels, while the green body indicates that the index managed to close above its opening price.

The recovery was seen near a significant support zone, where multiple technical factors came together. The index took support near the 38.2% Fibonacci retracement level of the recent upmove from the April 2 low, along with the July 29 gap area. It also bounced from the previous parallel lows, making Wednesday’s low of 23,786 an important level to watch.

A decisive break below 23,786 could bring renewed selling pressure and may drag the index towards the July swing low near the 23,600 zone.

Broader Trend Still Signals Caution

Despite the recovery, the overall technical structure remains weak. The Nifty continues to trade below its 20-DMA, 50-DMA, 100-DMA, and 200-DMA, indicating that the broader trend is yet to improve.

The 20-DMA continues to move lower, while the 50-DMA has flattened, reflecting a lack of strength in the near-term momentum. The Bollinger Bands have also started trending downward, suggesting that the index remains under pressure.

Momentum indicators continue to remain subdued, with the MACD trading below the zero line. The 14-period daily RSI has slipped below the 40 mark, indicating weakening momentum.

Resistance Levels to Determine the Next Move

For Thursday’s session, the immediate hurdle for the Nifty is placed near the previous session’s low of 23,952.55. Above this, the 100-DMA near 24,029 will be the next important resistance level.

A sustained move above 24,029 could improve sentiment and support a short-term recovery towards higher levels. Until the index reclaims this zone convincingly, any upside move is likely to face selling pressure.

Nifty View for September 3: Recovery Attempt Needs Follow-Through

The Nifty’s ability to defend the 23,786 level keeps the immediate bias neutral to slightly positive, as the index has held a key support area. The move below the lower Bollinger Band also indicates the possibility of a technical pullback towards the band in the coming sessions.

However, the broader setup does not yet indicate a confirmed reversal. Traders should look for a strong confirmation candle before considering fresh long positions. A close above 24,029 would strengthen the recovery case, while a break below 23,786 would signal further weakness.

Stock to Watch: Arvind

Arvind has witnessed a breakout from a triangular pattern, supported by higher-than-average trading volumes, indicating strong participation during the move. The stock is currently trading above its 20-DMA, 50-DMA, 100-DMA, and 200-DMA.

The moving averages are placed in a favourable sequence, further strengthening the bullish setup. Momentum indicators are also supportive, with the 14-period daily RSI moving into bullish territory. The daily MACD is trending upward and remains above its nine-period average, confirming the positive momentum in the stock.

As long as the stock sustains above ₹575, the outlook remains positive, with the potential to move towards the ₹600–610 zone. Traders can maintain a stop loss at ₹548 to manage downside risk.

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