Nifty Index Approaches Four-Month Peak with Strong Bullish Momentum and Positive Outlook

The Nifty index approached its four-month peak on Thursday, following a robust bullish breakout. The session began with a significant gap-up, allowing bulls to dominate and force bears to cover their short positions. The index maintained its upward momentum, making higher highs and lows, which underscored its ongoing bullish trend. By the end of the day, Nifty rose by 261.75 points, closing at 25,585.30.

The Nifty Bank index also moved closer to its all-time high of 57,628 on Thursday. It continued its strong positive trend with bulls maintaining control throughout the day. The session started with a solid gap-up, forcing bears to unwind their short positions. The index's consistent higher highs and lows indicate ongoing buying strength. Nifty Bank closed at 57,422.55, up 622.65 points, confirming the breakout and opening more upside potential.

Dhupesh Dhameja, Derivatives Research Analyst at SAMCO Securities, noted that "The Nifty has decisively broken out above multiple resistance zones and continues to exhibit a strong bullish setup." He added that the index's position above its short- and medium-term moving averages signals a firm support base. Consistent put writing at at-the-money strikes further highlights traders' conviction in the ongoing uptrend.

Dhameja further commented that "A sustained move above the 25,650 resistance zone could spark follow-up buying and a short-covering rally, potentially propelling the index toward 25,800 in the near term." He mentioned that immediate support is at 25,300-25,350, where buying interest is expected to cushion any declines. As long as the index trades above this support zone, bullish momentum is likely to persist.

Regarding the Nifty Bank index, Dhameja stated that it "has sustained its upward trajectory, closing firmly above the 57,000 mark and just short of its all-time high." He noted that the index remains comfortably positioned above its 10-day and 20-day exponential moving averages. This indicates a resilient bullish setup with consistent put writing at at-the-money strikes reflecting traders' confidence in the ongoing uptrend.

Technical analyst Riyank Arora from Mehta Equities Ltd. recommended two stocks for purchase on Friday, October 17. Ather Energy is trading with strong bullish momentum after a recent consolidation breakout. The stock has maintained higher highs and lows, reflecting steady accumulation. Volume patterns suggest active buying interest. Sustaining above ₹688 may push the price toward ₹740 and ₹770. A strict stop-loss at ₹660 is advised to protect profits amid market volatility.

Crizac has shown a strong rebound from its recent support zone and is now forming a bullish structure on the daily chart. The price is comfortably above short-term moving averages, supported by rising volumes. RSI confirms renewed buying strength, indicating further upside potential. Sustaining above ₹290 could take the stock toward ₹320 and ₹340. Traders should maintain a stop-loss at ₹275.

The India VIX increased by 3.18% on Thursday but remains near historically low levels. This suggests traders are calm and focused on risk-reduction strategies.

"A sustained move above the 57,600 all-time high zone could trigger fresh follow-up buying and short-covering," Dhameja added regarding Nifty Bank's outlook. He stated that this could propel the index toward 58,200 in the near term. Immediate support lies at 57,000-56,900 where strong buying interest is expected to cushion declines.

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