Nifty 50 and Bank Nifty Face Test of Resilience Above Wednesday's Lows Amid Ongoing Middle East Tensions

Nifty 50 and Bank Nifty Analysis

Market Overview

The Nifty 50 has experienced a sharp decline of 4% over the last three consecutive sessions, amid escalating tensions between the US-Israel bloc and Iran. The VIX has surged to a 10-month high, rallying 62% during the same period. While a rebound is possible, sustainability will be key, given the strong position of bears.

Key Levels

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• Key Resistance: 24,728
• Key Support: 24,100

Nifty 50 Performance

On March 4, the Nifty 50 plummeted 385 points (1.55%) to 24,480, while the Bank Nifty dropped 1,084 points (1.81%) to 58,755. Market breadth favored bears, with 2,439 shares declining compared to 525 advancing shares on the NSE.

Technical Analysis

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According to Ashish Kyal, Founder and CEO of Waves Strategy Advisors, the 24,700-24,728 zone is a key resistance area with the highest trading activity. A bullish reversal would require a close above the prior day's high while holding the prior day's low.

Market Strategy

• Short positions can be created below 24,340 with a stop-loss at 24,480 and targets of 24,200, followed by 24,100.

Nilesh Jain, VP- Head of Technical and Derivative research at Centrum Finverse, suggests that the Nifty 50 is now trading below all key short-term and long-term moving averages and has decisively broken below the 25,000 mark. Momentum indicators and oscillators have turned bearish, with the RSI slipping into the oversold zone near 30.

Strategy

• Buy Nifty Futures above 24,600 with a stop-loss at 24,420, targeting 24,950.

Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, notes that the Nifty is trading nearly 3% below its crucial 200-day EMA, a development that typically signals a weakening trend. The daily RSI has slipped below the 30 mark and continues to trend downward, confirming that bearish momentum remains dominant.

Key Levels

• Key Resistance: 24,600, 24,630
• Key Support: 24,350, 24,300, 24,150

Strategy

• Buy Nifty Futures above 24,700 with a stop-loss at 24,450, targeting 25,100.

Bank Nifty Outlook

The Bank Nifty may rebound towards 59,200, followed by 59,500, but a break below the previous day's low of 58,394 could increase the risk of a decline towards the Budget Day low of 57,783.