Bears Retain Control as VIX Stays Above 25, Nifty Rebounds 530 Points; Support at 22,200 Crucial for Future Gains; Bank Nifty Faces Downside Risk on Iran Tensions

Market Update: Nifty 50 Posts Moderate Gains Amid Weak Broader Structure

The Nifty 50 recovered 530 points from the day's low, particularly after a gap-down opening, and closed with moderate gains on April 2. The broader structure, however, remains weak, and the depth of genuine conviction was lacking in the short-covering-led intraday recovery, as the VIX remained above the 25 zone. Meanwhile, the rupee gained for a fourth consecutive session to close at 93.16 against the US dollar, strengthening from its record low of 95.22.

Caution prevails ahead of the long weekend, particularly following Donald Trump's threat to hit Iran extremely hard, signaling rising tensions in West Asia. The index continues to trade below its key short- and long-term moving averages, while the RSI remains below the 40 mark, indicating persistent bearish momentum.

Unless the Nifty decisively breaks and sustains above the 22,950–23,000 zone, with strong follow-through buying toward 23,500—a crucial hurdle for further sharp recovery—the overall trend is likely to remain under pressure. However, immediate support is placed at 22,500–22,400, followed by the 22,200–22,000 zone, according to experts.

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The Nifty 50 opened 300 points lower and briefly breached its prior swing low of 22,284 (seen on March 30), as well as the upward-sloping support trendline (adjoining June 2024 and April 2025 lows), to hit an intraday low of 22,183. However, the index managed to reclaim these levels by the close—a sign of buying interest at lower levels—and closed at 22,713, up 34 points.

It formed a long green candle with a minor lower shadow on the daily timeframe after opening sharply lower, indicating the formation of a bullish counterattack-type candlestick pattern at the lows.

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, noted that the bearish chart pattern of lower tops and bottoms continued on the daily chart, and Thursday's low of 22,182 could now be considered a new lower bottom of the pattern. According to him, the Nifty needs to sustain above the 23,000 level to consider this a bottom reversal pattern. Immediate support is placed at the 22,400 level.

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Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities, also agreed with Nagaraj, saying that any sustained move below 22,400 could result in Nifty extending its weakness towards 22,200, followed by 22,000 in the short term. "On the upside, the 22,950–23,000 zone is likely to act as strong resistance," he said.

For the week, the benchmark Nifty 50 declined half a percent and formed a high wave-like candlestick pattern on the weekly timeframe, following a Doji formation in the previous two weeks, with the RSI at 27.88 and the MACD sustaining below both the zero line and the signal line. All this indicates continued weakness in the broader trend.

The weekly options data indicates a 22,000–23,000 range for the Nifty 50 in the short term, as a breakout on either side of the range could provide further direction to the market.

The maximum Put open interest was observed at the 22,000 strike, followed by the 22,500 and 22,200 strikes, while the 23,000 strike holds the maximum Call open interest, followed by the 23,500 and 23,200 strikes. The maximum Put writing was seen at the 22,000, 22,200, and 22,300 strikes, while the 23,000, 23,200, and 22,200 strikes saw maximum Call writing.

Meanwhile, India VIX, the fear gauge, remained in an elevated zone and rose 2.04 percent to 25.52, keeping bulls cautious. Volatility needs to drop and sustain below the 18 level for bulls to enter a comfort zone.

Bank Nifty

The banking index also opened sharply lower and broke the psychological 50,000 mark intraday to touch a low of 49,955. It also came close to the upward-sloping support trendline (adjoining June 2024 and March 2025 lows), before bouncing back nearly 1,600 points from the said low.

The index closed 100 points higher at 51,549 and formed a long bullish candle, following a Doji-like candlestick formation in the previous session, indicating demand at lower levels. Bank Nifty needs to see follow-up buying next week and fill the bearish gap (51,625–52,200) of March 30 for a further uptrend.

The banking index has bounced from near the 78.6% Fibonacci retracement level rather than a clean reclaim, suggesting a relief pullback. The RSI shows signs of a bullish crossover from oversold levels, confirming positive divergence and supporting a short-term recovery outlook.

However, the broader trend remains weak; hence, a cautious stance is advised, said Vatsal Bhuva, Technical Analyst at LKP Securities. On the upside, 52,500–53,000 may act as resistance, while immediate support is placed around 50,500, followed by 50,000.

For the week, Bank Nifty shed 1.4 percent and extended its weakness for the sixth consecutive session, forming a Doji-like candlestick pattern for yet another week. The RSI fell to 29.51, and the MACD remained below both the reference and zero lines, with a long red bar in the histogram. All this indicates continued bearish momentum.