Nifty at 20K, will the optimism last? Here's what chart suggests

The NSE Nifty may face some resistance around 20,130; above which the index can potentially hit a new all-time high soon.

The NSE Nifty 50 topped the 20,000-mark, and was seen quoting around 20,020 levels, in intra-day deals on Wednesday, November 29, after a gap of over two months. The Nifty last quoted above the 20,000-mark on September 18, a day after the index had registered its life-time high at 20,222.40. 

In the current rally, the Nifty has gained over 6 per cent from its low of 18,838 hit on October 26. 

Further, the overall market capitalisation of Indian stock markets hit the historic $4 trillion market cap milestone for the first time ever on Wednesday. The market value of all BSE-listed companies touched a record high of Rs 333 trillion, translating into $4 trillion.  

According to Bloomberg data, India’s market cap has risen nearly 15 per cent so far in 2023, even as China's has seen a 5 per cent erosion in its market cap. The market cap gains this year are propelled by gains in the broader market mid- and small-cap stocks. READ MORE

So far on a year-till-date basis, the NSE benchmark index, Nifty, has rallied 10.5 per cent, and the S&P BSE Sensex 30 has gained 9.3 per cent. In comparison, the Nifty MidCap index has soared 35 per cent, while the SmallCap has zoomed over 43 per cent so far this calendar year.

Will the optimism last? Here's what the charts suggest at present levels.

Sensex

Current Price: 66,560

Upside Potential: 3%

As per the quarterly Fibonacci chart, the bias for the Sensex for the remainder of the year is likely to remain favourbale as long as the BSE benchmark holds above 65,500. On the upside, the Sensex may counter some resistance around 66,700, above which the index shall target 67,100 - 67,500 range soon.

Similarly, the yearly Fibonacci chart suggests a potential upside target of 68,650.

Nifty

Current Price: 20,020

Resistance: 20,130

Support: 19,600

The NSE Nifty is just 1 per cent shy of its summit at 20,222. Key momentum oscillators, although, in overbought zone still are clearly in favour of the bulls on the daily chart for now.

However, the Bollinger Bands on the weekly scale in particular, indicates likely resistance for the index around 20,130-odd levels. Sustained trade above the same can lead the index to an all-time high.

However, in case, the Nifty fails to cross and sustain 20,130, a pullback towards 19,600 seems possible, suggests the weekly chart. CLICK HERE FOR THE CHART

Nifty MidCap

Current Price: 42,610

Key monthly hurdle: 42,650

The Nifty MidCap index seems placed fairly bullish on the charts on multiple time-frames. However, on the monthly scale the index is seen testing resistance around its rising trend at 42,650-odd levels. 

The index will need to conquer this resistance for fresh upward movement. Failure to surpass this resistance on a monthly closing basis, could lead to a consolidation or sideways trend in the coming months. 

Meanwhile, the daily chart suggests that the index could test 43,200 level on the upside in the near term. CLICK HERE FOR THE CHART

Nifty SmallCap

Current Price: 13,950

Key monthly hurdle: 13,600

Similar to the MidCap index, the next few sessions are likely to be very crucial for the Nifty SmallCap index as it makes an attempt to conquer its rising trend line resistance on the monthly scale, which currently stands around 13,600. A monthly close above the same could augment further strength for the index.

If the index is successful in conquering the hurdle, the index may continue it’s up move, with long-term supports seen moving higher around the previous peaks at 11,850 - 12,000 range. 

In the short-term the index may spurt to 14,300 levels. Whereas, over the long-term the index may extend its up mover by another 10 - 15 per cent indicating an upside target of 15,350 - 16,050. CLICK HERE FOR THE CHART