Nifty 50 and Bank Nifty Rally Likely to Extend as Oil Prices Fall Below $100 Amid Hormuz Strait Reopening Hopes

Indian Markets Eye 24,000 Zone Amid Bullish Sentiment

The Indian stock market is poised to make a move towards the 24,000 zone, a psychological level that coincides with the 50-day Exponential Moving Average (EMA). This development comes against the backdrop of a weakening bearish trend from momentum indicators and a decline in oil prices below $100 a barrel.

Market Performance

On May 22, the Nifty 50 rose 65 points (0.27 percent) to close at 23,719, while the Bank Nifty rallied 616 points (1.15 percent) to 54,055. Market breadth remained in favor of bulls, with about 1,539 shares advancing against 1,407 declining shares on the National Stock Exchange.

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Market Analysis

Aditya Thukral, Founder & Analyst of AT Research & Risk Managers, notes that the Nifty 50 has been range-bound, failing to break above the resistance zone of 23,800-23,860. However, the trend remains sideways, with the index staying within the recent swing low and swing high levels of 23,397 and 23,860, respectively.

Rajesh Palviya, Senior Vice President Research (Head of Research) at Axis Securities, observes that the Nifty closed 76 points higher on a weekly basis, forming a bullish candle on the weekly chart. However, the index remains within the previous week's high-low range, indicating a lack of decisive strength on either side.

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Anshul Jain, Head of Research at Lakshmishree Investments, believes that the Nifty is consolidating after successfully defending the bullish weekly fair value gap in the prior session. The broader structure now points toward a range-bound phase, with prices coiling between major higher time-frame levels.

Key Resistance and Support Levels

Trading Strategies

Aditya Thukral recommends buying Nifty Futures only above 23,860 with a stop-loss at 23,760, targeting 24,060.

Rajesh Palviya suggests buying Nifty Futures around 23,650 with a stop-loss at 23,550, targeting 23,900-24,100.

Anshul Jain advises avoiding range-bound action or trading the range extremes of 23,250-24,000 for reversals.

Bank Nifty Outlook

Aditya Thukral believes that the Bank Nifty appears to be forming a base in the 53,000-54,400 range, with bulls waiting for a breakout above 54,400 to further validate this view.

Rajesh Palviya notes that the Bank Nifty witnessed strong buying interest near the lower band of the bullish gap zone around 52,778, which also coincides with the 61.8 percent Fibonacci retracement of the April rally.

Anshul Jain expects the Bank Nifty to remain relatively weak over the next few weeks, with a dead-cat bounce remaining highly probable if bulls manage to sustain prices above the crucial resistance zone near 54,400.