Nifty 50 and Bank Nifty Face Key Support Levels Amid Consolidation

Market Consolidation Expected Until April High is Reached

The Indian equity market is likely to witness consolidation with range-bound trading until it moves above the April high of around 24,600. Despite momentum indicators showing improvement and the benchmark index trading above its short- and medium-term moving averages, the market is expected to remain volatile.

Nifty 50 and Bank Nifty

The Nifty 50 needs to hold support at 24,200 for an upward journey, below which 24,000 will act as a crucial support level. On the upside, 24,400-24,600 are the levels to watch. Meanwhile, if the Bank Nifty manages to defend the 56,000 mark, a rally towards 56,600-56,800 is possible. However, a fall below this level could open the door for 55,500-55,600 levels.

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Market Performance on May 7

On May 7, the Nifty 50 fell 4.3 points to close at 24,327, while the Bank Nifty rose 66 points to 56,047. Market breadth remained dominated by bulls, with about 2,036 shares advancing compared to 921 declining shares on the National Stock Exchange.

Technical Analysis

Dhupesh Dhameja, Derivatives Research Analyst at Samco Securities, noted that the Nifty index traded in a narrow range with a marginal negative bias, indicating consolidation after the recent recovery rally. The index continues to sustain above the key 0.50 Fibonacci retracement zone (24,250), along with the 50-DEMA, highlighting an improving short-term structure and sustained buying interest at lower levels.

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Derivatives Perspective

The Put-Call Ratio (PCR) stands near 1.00, while Call writing around 24,400-24,500 caps the upside and Put writing near 24,200-24,000 provides strong support. As long as the index sustains above 24,200, a slightly constructive bias is likely to dominate, making a buy-on-dips strategy preferable.

Nifty Outlook and Strategy

Jay Mehta, Technical Research at JM Financial Services, noted that the Nifty remained range-bound between 23,780 and 24,350 over the past eight sessions. In the latest session, it broke above the range and reached a high of 24,482 but closed back within the range. The overall bias remains positive to mildly sideways as long as 23,780 holds.

Bank Nifty - Outlook and Positioning

Dhupesh Dhameja, Derivatives Research Analyst at Samco Securities, noted that the Nifty Bank index traded in a narrow range with a slight positive bias, indicating consolidation after the recent recovery move. The index continues to sustain above the 0.50 Fibonacci retracement zone (55,800), reflecting an improving short-term structure and sustained buying interest at lower levels.

Market Sentiment

Sumeet Bagadia, Executive Director at Choice Broking, noted that the 24,750-25,000 zone in the futures segment is emerging as an immediate resistance area, while support is seen developing in the 24,150-24,000 range. The Relative Strength Index (RSI) stands at 55.33, indicating positive but slightly moderating momentum.

Bank Nifty - Outlook and Positioning

Jay Mehta, Technical Research at JM Financial Services, noted that the Bank Nifty, similar to Nifty, has been trading in a range of 54,500-56,300 for the past eight sessions. The price is currently above the 20-day EMA and near the 50-day EMA but remains below the 100- and 200-day EMAs, which are acting as overhead resistance.