Nifty 50 and Bank Nifty May Face Continued Selling Pressure Amid Consolidation

Market Outlook: Nifty and Bank Nifty to Trade Range-Bound

The Indian stock market is expected to consolidate in the upcoming sessions, with range-bound trading likely to dominate the market. The key levels to watch for the Nifty 50 are 23,800, 24,000, and 23,500, while the Bank Nifty's immediate support is at 54,200.

On May 11, the Nifty 50 plunged 360 points, or 1.49 percent, to 23,816, while the Bank Nifty plummeted 871 points, or 1.57 percent, to 54,440. Market breadth favored the bears, with about 2,204 shares declining compared to 782 advancing on the National Stock Exchange.

Nifty Outlook and Strategy

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According to experts, the Nifty closed in negative territory in the last trading session and settled well below the 24,000 level, near its previous swing low of 23,800, which is a negative sign. A break below 23,800 could drag the index toward the next support level at 23,500.

The India VIX has once again reversed from the 16 level and is now at 18.50, indicating a sideways-to-negative trend in the short term. Overall, the short-term trend remains range-bound, and unless the 24,500 level is decisively crossed on a closing basis, the uptrend will not be confirmed.

Strategy for Nifty Futures

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• Sell Nifty Futures on a rise near 24,000, with a stop-loss at 24,300, targeting 23,500.
• Alternatively, buy Nifty Futures on dips near 23,500, with a stop-loss below 23,200, targeting 24,000 and 24,200.

Bank Nifty Outlook and Positioning

The Bank Nifty has been one of the underperformers, along with Nifty IT, and both indices are weighing on the broader Nifty. Therefore, the short-term outlook remains sideways to negative unless the index decisively crosses 56,500 on the upside.

Strategy for Bank Nifty Futures

• Sell Bank Nifty Futures on a rise near 55,500, with a stop-loss at 56,500, targeting 53,000.
• Alternatively, buy Bank Nifty Futures in the 54,400–54,300 zone, with a stop-loss at 53,800, targeting 55,500.

Market Experts' Views

• Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI Securities: The short-term trend remains range-bound, and unless the 24,500 level is decisively crossed on a closing basis, the uptrend will not be confirmed.
• Jigar S Patel, Senior Manager - Equity Research at Anand Rathi: The 38.2 percent retracement level of the Nifty's April rally is placed near the 23,680 zone, which is likely to act as an important technical support area.
• Somil Mehta, Head of Retail Research at Mirae Asset ShareKhan: The Nifty index is trading within the broader range of 23,550–24,600, and the immediate resistance level is placed at 24,350.