Market Outlook: Iran De-Escalation Hopes and Their Impact on Nifty 50 and Bank Nifty April Series

Market Outlook: Potential Rebound Ahead as Nifty 50 Faces Key Resistance

After a tumultuous two sessions, the benchmark Nifty 50 may be poised for a rebound at the beginning of the April series, following Tehran's willingness to end the war with the United States, subject to guarantees for the security and interests of the Iranian people, along with a correction in oil prices. This optimism is further bolstered by the appearance of a triple divergence—a potential trend reversal pattern—and oversold conditions.

The Nifty 50 crashed nearly 1,000 points in the last two sessions, plummeting 488 points (2.14 percent) to 22,331 on March 30, while the Bank Nifty tanked 1,999 points (3.82 percent) to 50,275. Bears maintained dominance over market breadth, with about 2,635 shares declining compared to 429 advancing shares on the NSE.

Nifty 50 Outlook and Strategy

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Aditya Thukral, Founder & Analyst of AT Research & Risk Managers, points out that the Nifty 50 witnessed another bearish day, breaking the previous swing low and exhibiting a triple divergence pattern. This pattern is a potential trend reversal signal; however, reversal will only occur once 23,465.35—the recent swing high—is taken out. The 9-day EMA, which has been acting as resistance for days, is placed around 22,880, and prices sustaining below all major exponential moving averages on the daily chart indicates bearish market conditions.

To benefit from this potential rebound, investors can buy Nifty Futures only above 22,600, with a stop-loss of 22,500, targeting 22,800.

Bank Nifty Outlook and Positioning

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Aditya Thukral also notes that the banking index weakened further despite a couple of recovery attempts, which failed. The 9-day EMA has been acting as resistance over the past few days, and stability will only be seen once the index sustains above this level. The trend remains downward, with the formation of lower lows and lower highs, and prices continue to trade below all major exponential moving averages.

To benefit from this potential bounce, investors can buy Bank Nifty Futures only above 51,320, with a stop-loss of 51,020, targeting 51,920.

Market Analysts' Views

Ashish Kyal, Founder and CEO of Waves Strategy Advisors, notes that the Nifty 50 has continued to exhibit a sustained bearish trend, with nearly every candle closing below the previous week's low over the past seven consecutive weeks. He recommends using every pullback as a shorting opportunity, with the next crucial support zone near the 21,980–22,070 range.

Somil Mehta, Head of Retail Research at Mirae Asset ShareKhan, points out that the Nifty index has broken the major support at 22,470, opening the possibility of drifting lower to 21,750–21,250 levels in the coming sessions. He recommends selling Nifty Futures between 22,470–22,600, with a stop-loss at 23,000, targeting 21,750–21,250.

In the Bank Nifty, Ashish Kyal notes that the index has continued to drift lower with each passing session, closing below the 51,000 mark for the first time since April 2025. He recommends avoiding catching bottoms and using pullbacks as selling opportunities for a move towards 49,900, followed by 49,617 levels, unless a sustained break above 53,250 is seen.

Somil Mehta notes that the Bank Nifty index broke below the 51,323 level in Monday's session, confirming a lower high–lower low structure. He recommends selling Bank Nifty Futures between 50,750–51,000, with a stop-loss at 52,200, targeting 49,150–47,700.