Nifty Outlook For October 14: Bulls set sight on 23,000 but this level holds the key

After all the relentless drubbing and the lack of conviction at higher levels, the bulls would finally be relieved (not happy) at watching the screen currently. Not only has the Nifty broken above a key resistance zone, but also managed to sustain at higher levels.

The weekly expiry is exactly what the doctor had ordered for the bulls. IT doing the heavy-lifting, and then came the sentiment impact from Finance Minister Nirmala Sitharaman, who said that she will be keen to hear views on the Long Term Capital Gains Tax (LTCG). That provided the Nifty the kicker it needed to break past the 22,600 mark, which it had failed to do so for most of Tuesday's trading session.

Everything that could possibly augur well for the bulls has done so. US bond yields are cooling, oil prices remain elevated but are heading down instead of moving back towards the $110 a barrel mark, and most importantly, the semiconductor stocks sold-off globally, be it the US futures, or those in South Korea, Japan, or Taiwan, everything bode well for Indian IT.

Adding to that have been not-so-disappointing results from both TCS and HCLTech, that have given the bulls further hope that IT has finally found its floor, and while the upside may still be distant, but the downside is now done for.

With the Nifty now having closed above the 22,700 mark on Tuesday, the bulls would hope that this recovery trend sustains for the rest of the week, as it was Wednesday and Thursday that things had turned awry for the index last week. The bulls now want to move back to the 23,000 mark swiftly and would hope that one, 22,500 acts as a support now instead of a barrier, and two, the 22,180 levels are not retested again.

Jai Bala of Cashthechaos told CNBC-TV18 that before 23,000, the Nifty closing above 22,900 on a weekly basis will indeed be a very big positive for the market. "We just have to be a little patient and see whether the follow through sustains and how the market closes on Friday," he said.

Going into Wednesday's session, earnings will start to pick up pace for the rest of the week. Before more numbers, the market will react to results from Tata Elxsi, Anand Rathi Shares & Stock Brokers, Transformers & Rectifiers, and new listings such as Hero Motors and SS Retail.

As many 15 important results will be reported on Wednesday, including Canara Bank, BHEL, Aditya Birla Money, Bajaj Consumer Care, CEAT, Groww, HDB Financial, ICICI Lombard, MRPL, Tata Technologies among others.

Nagaraj Shetti of HDFC Securities said that the Nifty is struck within the 22,300 - 22,800 range but a decisive move above 22,800 will confirm an important bottom reversal pattern and could open up further short-covering moves. Any weakness on the downside could now find support at 22,550 levels, he added.

Going ahead, the 22,830 - 22,850 zone could act as an immediate hurdle for the Nifty, according to Sudeep Shah of SBI Securities. However, a sustained move above 22,850 will open up further upside towards the 23,000 mark. As long as the index remains above 22,580 - 22,550 zones, the pullback bias may remain intact, he added.

The Nifty Bank continued its slow and steady move upwards and now finds itself at a critical juncture. The index is now near the key resistance band of 55,500 and a move above that could accelerate the recovery on the banking index. The index did make an intraday high of 55,551, but could not sustain above that on Tuesday.

Vatsal Bhuva of LKP Securities said that the technical strength, including a close above the 20-Day Moving Average (DMA) and a bullish RSI crossover indicates that the index is poised for a move towards the 56,000 - 56,200 levels. The previous hurdle of 55,200 now will act as a support and 56,000 is now a key resistance on the upside.