Nifty 50 at Risk of Falling Below 24,500 as Bank Nifty Reverses Gains Amid Rising Oil Prices and Iran Tensions

Market Outlook and Strategy

Nifty 50

The Nifty 50 index is likely to face a bearish momentum in the upcoming sessions, considering the recent spike in oil prices amid escalating tensions in the Middle East. The index will need to convincingly reclaim and sustain above 25,230 (200 DEMA) to avoid consolidation with range-bound trading. Key support levels include 24,500 and 24,300.

On March 5, the Nifty 50 rallied 285 points (1.17 percent) to 24,766, while the Bank Nifty jumped 301 points (0.51 percent) to 59,056, with improving market breadth.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Key Resistance: 24,800, 24,950, 25,150 Key Support: 24,600, 24,500, 24,400

Nifty 50 Strategy

• Derivative Research Analyst Dhupesh Dhameja at Samco Securities recommends a buy-on-dips approach until the support zone remains intact.
• The Bull Put Spread for the March 10 expiry can be considered by selling one lot of 25,000 PE at Rs 354 and buying one lot of 24,700 PE at Rs 196.
• Stop-Loss: Hold the strategy strictly with a maximum Mark-to-Market (MTM) loss capped at Rs 6,000.
• Target: Hold the strategy aiming for a maximum Mark-to-Market (MTM) profit target of Rs 10,227.

Nifty 50 Outlook

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

• Technical Research Analyst Jay Mehta at JM Financial Services expects the Nifty to maintain a bearish bias in the near term, with selling opportunities near 24,910 and 25,045 targeting 24,640 and 24,370.
• Stop-Loss: Maintain a stop-loss at 25,200.

Nifty 50 Technical Analysis

• The Relative Strength Index (RSI) has rebounded from the oversold zone but remains below 40, indicating a recovery in the nascent stage.
• The price remains below key EMAs, signaling inherent weakness.

Bank Nifty

• The Bank Nifty is unlikely to sustain above 59,000 considering the bearish mood, but 58,500–58,400 is likely to act as a key support zone.
• Below this, a move toward the February low is possible.
• Key Resistance: 59,000
• Key Support: 58,500, 58,400