Bears Maintain Control Despite Recent Recovery as Nifty Awaits Break Above 23,800 for Uptrend Continuation

Nifty 50 Extends Upward Journey for Second Consecutive Session

The Nifty 50 continued its upward trajectory for the second consecutive session, closing above the previous day's high with a rally of over 1 percent on May 14. This positive movement indicates a temporary pause in the recent weakness, but the overall market breadth remained muted. Despite the two-day recovery, the index continues to trade below its key moving averages (10-, 20-, 50-, 100-, and 200-day EMAs), all of which are trending downward, reflecting that the broader short-term trend remains under pressure.

The inability to reclaim these crucial averages suggests that bullish momentum is yet to gain full control. For a further uptrend, the index needs to deliver a sustainable close above 23,800, followed by 24,000–24,100 (the 23.6 percent Fibonacci retracement of the April rally and the midline of the Bollinger Bands). However, 23,400 is expected to act as immediate crucial support, below which the bears may gain strength, according to experts.

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The Nifty 50 opened more than 100 points higher and remained in positive territory throughout the session. The index picked up momentum in late morning trade and rallied to close at 23,690. On the daily charts, the index formed a bullish candle with minor shadows on both sides, indicating a positive trend amid volatility. The daily RSI took support near the 40 mark and witnessed a smart rebound from lower levels to 45.86. Currently, the RSI is oscillating within the 40–60 zone, which, as per the RSI range shift theory, indicates a phase of sideways consolidation rather than a strong trending move.

The MACD remained below the zero and signal lines, though the red bars on the MACD histogram faded. All this indicates a cautious undertone in the market despite the recent recovery. The weekly options data suggested that 24,000 is expected to be the next key resistance level for the Nifty 50, while 23,500–23,400 is likely to act as a support zone. The maximum Call open interest was placed at the 24,000 strike, followed by the 23,800 and 23,700 strikes, while the 23,000 strike holds the maximum Put open interest, followed by the 23,500 and 23,400 strikes.

The India VIX, the fear gauge, corrected 4.18 percent to 18.61 after four consecutive sessions of gains, providing some comfort to bulls. However, a fall below the 17 level is necessary for bulls to regain a healthy comfort zone.

The Bank Nifty rebounded sharply by 673 points (1.26 percent) to close at 54,129 after a four-day correction, forming a bullish candle with shadows on both sides. This market action indicates a positive trend amid volatility, while the index also closed above the previous day's high. However, the overall trend remains bearish, as the Bank Nifty traded well below all key moving averages, with all of them sloping downward. Meanwhile, momentum indicators suggest a sideways trend in the near term.

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Going Ahead: Key Levels to Watch

Going ahead, the 54,700–54,800 zone is expected to act as an immediate hurdle for the Bank Nifty. A sustained move above 54,800 could extend the pullback rally towards the 55,300 level, according to experts. On the downside, the 53,600–53,500 zone is likely to serve as crucial support.