Nifty 50 and Bank Nifty Face Crucial Test as Markets Watch State Election Results for Market Direction

Market Outlook: Nifty, Bank Nifty Face Crucial Week Ahead

The Indian equity market is poised for a crucial week ahead, with the focus shifting to the results of the five state elections and developments regarding the peace deal between the US and Iran. The market needs to break last week's trading range of 23,800–24,350 to make a decisive move.

Nifty Outlook

The Nifty 50 index has been trading in a range-bound setup, with the 0.382 Fibonacci support zone (23,770–23,750) acting as a buying interest zone. However, the index has consistently faced rejection near the 0.50 Fibonacci zone (24,200–24,250), indicating strong supply pressure on every rise.

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Experts expect a range-bound setup with a cautious undertone, while the Relative Strength Index (RSI) hovering around 50 suggests a lack of directional momentum.

Bank Nifty Outlook

The Bank Nifty remains under pressure, sustaining below the 0.50 Fibonacci zone (55,800), confirming a breakdown from the prior consolidation. However, the 0.382 Fibonacci support (54,400–54,200) is holding, indicating buying interest at lower levels and a developing range structure.

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Experts recommend a sell-on-rise strategy for Bank Nifty, with a focus on short positions in Bank Nifty May Futures on a pullback towards the 55,500–55,550 zone.

Expert Views

Dhupesh Dhameja, Derivative Research Analyst at Samco Securities

The Nifty index extended its weakness, yet continues to defend the 0.382 Fibonacci support zone, indicating buying interest emerging at lower levels and the formation of a near-term demand base. However, the index has consistently faced rejection near the 0.50 Fibonacci zone, highlighting strong supply pressure on every rise.

Rajesh Bhosale, Technical Analyst at Angel One

On the daily chart, all four trading sessions formed small-bodied candles, and on the weekly chart, this translated into a classical "Doji" formation, indicating indecision and a lack of a clear trend. Despite the subdued weekly performance, the broader structure remains constructive.

Rajesh Palviya, Senior Vice President Research (Head of Research) at Axis Securities

Nifty closed with a 100-point gain for the last week. On the weekly chart, the index formed a small bullish candle with shadows on both sides, indicating a pause after the recent rally and indecision among market participants.

Jay Mehta, Technical Research at JM Financial Services

Nifty's daily structure improved significantly in April, with the index rallying nearly 11 percent from the monthly low. Over the past two weeks, Nifty has been in a sideways consolidation within the range of 23,780–24,500.

Key Strategies

• Dhupesh Dhameja: Consider a Bear Call Spread for the May 5 expiry by selling one lot of 23,900 CE at Rs 285 and buying one lot of 24,150 CE at Rs 145.
• Rajesh Bhosale: Buy Nifty Futures on dips around 23,850, with a stop-loss of 23,600, targeting 24,600.
• Rajesh Palviya: Buy Nifty Futures around 23,900 with a stop-loss of 23,800, targeting 24,100–24,250.
• Jay Mehta: Wait for a decisive breakout from the 23,780–24,350 range. On a downside breakout, look for shorting opportunities toward the mentioned support levels. On an upside breakout, look for long trades.
• Dhupesh Dhameja: Traders can look to initiate short positions in Bank Nifty May Futures on a pullback towards the 55,500–55,550 zone, keeping a strict stop-loss above 55,750.
• Rajesh Bhosale: Buy Bank Nifty Futures on dips around 54,600, with a stop-loss of 54,000, targeting 57,000.
• Rajesh Palviya: Buy Bank Nifty Futures around 54,800 with a stop-loss of 54,650, targeting 55,200–55,400.