Nifty 50 and Bank Nifty Eye Rebound as Bulls Seek to Recapture Wednesday's Highs

Market Rebounds, But Bears Remain in Control

The market rebounded after a four-day correction and closed above the crucial 23,400 zone, which coincides with the 50 percent Fibonacci retracement level. However, the overall trend remains in favor of bears, and experts advise a sell-on-rally strategy. If the index manages to hold 23,400 in the upcoming sessions, bulls may drive it toward 23,500–23,600 (near Wednesday's high). However, a fall below this level could open the door to 23,250–23,200.

On May 13, the Nifty 50 rose 33 points to close at 23,413, while the Bank Nifty fell 99 points to 53,456. Market breadth favored bulls after the bearish pressure seen over the last few sessions. About 1,734 shares advanced, compared to 1,215 declining shares on the National Stock Exchange.

Nifty Outlook and Strategy

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Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities

On Monday, the benchmark Nifty index decisively broke down from its 12-session consolidation range, triggering intense selling pressure across the broader market. From its recent swing high of 24,601, the index declined by more than 1,200 points. However, after the steep decline, the index showed signs of temporary exhaustion on Wednesday and formed a High Wave candle on the daily chart, reflecting heightened indecisiveness and uncertainty among market participants at lower levels.

Despite the indecisive candle formation, the overall technical structure continues to remain weak and tilted in favor of bears. The index is trading comfortably below its crucial short-term as well as long-term moving averages, and these averages are gradually sloping downward, indicating a weakening trend structure.

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Momentum indicators are also failing to provide encouraging signals. The daily RSI is hovering near the 40 mark and continues to trade below its 9-day average, suggesting subdued momentum and a lack of buying strength. In addition, the MACD line has slipped below the signal line, while the histogram has turned negative, indicating increasing bearish momentum in the near term.

Going ahead, the 23,100–23,050 zone will act as a crucial support area for the index, as the 61.8 percent Fibonacci retracement level of the recent upward rally is placed around this region. A decisive breakdown below the 23,050 mark could further intensify the corrective phase and drag the index toward 22,900, followed by 22,700 in the short term.

Bank Nifty - Outlook and Positioning

Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities

The banking benchmark index, Bank Nifty, extended its losing streak for the fourth consecutive trading session, indicating sustained selling pressure. The index continues to trade well below its key moving averages, reflecting a weak trend structure.

Momentum indicators further support the bearish outlook, with the daily RSI remaining below the 40 mark and trending lower. Additionally, the daily MACD is positioned below both its zero line and signal line, reinforcing the negative bias.

Given this setup, Bank Nifty is likely to continue underperforming in the near term. In terms of key levels, the 52,800–52,700 zone is expected to act as crucial support, as it coincides with the 61.8 percent Fibonacci retracement of the recent upmove.

A decisive break below 52,700 could open the door for further downside toward 52,200, followed by 51,500 in the short term. On the upside, the 54,300–54,400 zone is likely to act as immediate resistance for the index.

Strategy

• Sell Nifty Futures below 23,400, with a stop-loss at 23,650 and a target of 23,000.
• Sell Bank Nifty Futures below 53,500, with a stop-loss at 53,900 and a target of 52,800.