Nifty 50 Faces Crucial Test Above 24,100 as Market Enters Rangebound Phase

Nifty 50 and Bank Nifty Analysis

The Nifty 50 is expected to witness follow-up buying interest in the upcoming weekly F&O expiry session to move towards the 24,300–24,350 levels. These levels are key hurdles, and only a convincing trade above them can take the index towards 24,600. Until then, range-bound trading may continue, with support at 24,000, followed by 23,800 as a crucial level.

On May 4, the Nifty 50 rallied 122 points (0.51 percent) to 24,119, while the Bank Nifty rose 15 points to 54,878. Market breadth remained positive, with 1,914 shares advancing against 1,084 declining shares on the National Stock Exchange.

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Nifty Outlook

Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI Securities, notes that the Nifty closed in positive territory, well above the 24,000 level, which currently has the highest Put base. However, the index once again witnessed a strong sell-off near the 24,300 level, which now has the highest Call base on an immediate basis. The 24,200 level has also seen heavy Call writing.

Based on these observations, it appears that the weekly expiry may remain below the 24,300 level. It will be essential for bulls to hold the 24,000 level in order to maintain a sideways expiry. Failure to hold 24,000 could lead to further sell-off towards 23,800 and eventually 23,500 in the coming days.

Strategy

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Buy Nifty Futures above 24,300 for targets of 24,500, 24,800, and 25,000, with a stop-loss below 24,000.

Bank Nifty Outlook

Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI Securities, notes that Bank Nifty has been a laggard and has underperformed the Nifty since the start of the geopolitical tensions. In the last trading week, the index witnessed a sharp sell-off from the 56,200 level, which led to a break below the 55,000 level.

As a result, the 55,000 and 56,000 strikes have seen strong Call bases, while 54,000 is acting as immediate support. For a reversal, the index needs to surpass and close above the 56,000 level. This would signal the end of the ongoing correction or consolidation and the start of a fresh uptrend. Until then, the index is likely to trade with a sideways-to-negative bias and may weigh on the Nifty in the near term.

Strategy

Buy Bank Nifty Futures above 56,000, with a stop-loss below 55,000, targeting 57,000 and 58,000.

Short-term Outlook for Nifty and Bank Nifty

Jigar S Patel, Senior Manager - Equity Research at Anand Rathi, notes that the Nifty 50 continues to show a negative crossover on the DMI indicator, indicating underlying weakness in trend strength. Over the past 5–6 trading sessions, the index has consistently faced strong resistance in the 24,300–24,350 zone, failing to sustain above it.

Even in the latest session, selling pressure emerged near the 24,300 mark, highlighting supply at higher levels. This repeated rejection suggests that bullish momentum is limited in the near term. As a result, a short-term pullback or consolidation phase cannot be ruled out before any decisive move unfolds.

Traders should remain cautious and closely monitor key support levels.

Strategy

Sell Nifty Futures in the 24,200–24,300 zone, with a stop-loss at 24,450, targeting 23,850.

Short-term Outlook for Bank Nifty

Jigar S Patel, Senior Manager - Equity Research at Anand Rathi, notes that Bank Nifty continues to show a negative crossover on the DMI indicator, indicating underlying weakness in trend strength. Over the past two trading sessions, the index has consistently faced strong resistance in the 55,600–56,100 zone, failing to sustain above it.

Even in the latest session, selling pressure emerged near the 55,600 mark, highlighting supply at higher levels. This repeated rejection suggests that bullish momentum is limited in the near term. As a result, a short-term pullback or consolidation phase cannot be ruled out before any decisive move unfolds.

Traders should remain cautious and closely monitor key support levels.

Strategy

Sell Bank Nifty Futures in the 55,400–55,300 zone, with a stop-loss at 56,000, targeting 54,200.

Somil Mehta's Outlook

Somil Mehta, Head of Retail Research at Mirae Asset ShareKhan, notes that the Nifty index formed a short-term peak around 24,600, nearly retracing 61.8 percent of the February-to-April decline. In the coming weeks, the index is expected to trade within a broader range of 23,500–24,600.

Strategy

Sell Nifty Futures below the 20-day SMA (currently 23,950), with a stop-loss at 24,350 and a downside target of 23,500.

Somil Mehta's Outlook for Bank Nifty

Somil Mehta, Head of Retail Research at Mirae Asset ShareKhan, notes that the Bank Nifty index is significantly underperforming the Nifty index in the short term. It has already closed below the 20-day SMA, indicating near-term weakness.

Strategy

Sell Bank Nifty Futures below 54,350, with a stop-loss at 55,860 and a downside target of 52,780.