Nifty 50 Faces Uphill Battle Against Bank Nifty as Trading Remains Range-Bound
Market Update: Nifty 50 and Bank Nifty Display Mixed Signals
The Indian equity market continues to exhibit mixed signals, with the Nifty 50 trading in a sideways to mildly bearish trend. Despite strong buying interest at lower levels, the benchmark index requires confirmation through follow-up buying to sustain its upward momentum.
Nifty 50: Trading Range Remains Intact
The Nifty 50 index closed at 23,406 on June 3, a decline of 78 points (0.33 percent) from the previous day's close. The Bank Nifty, on the other hand, rallied 471 points (0.88 percent) to 54,186. Market breadth remained weak, with 1,777 shares declining against 1,208 advancing shares on the National Stock Exchange.
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| Index | Previous Close | Current Close | Change |
|---|---|---|---|
| Nifty 50 | 23,484 | 23,406 | -78 (-0.33%) |
| Bank Nifty | 53,715 | 54,186 | 471 (0.88%) |
Technical Analysis: Bullish Reversal Patterns and Momentum Indicators
Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, notes that the Nifty 50 has formed bullish reversal candlestick patterns on both Tuesday and Wednesday, indicating emerging buying interest at lower levels. The daily RSI suggests that the index has been moving within a sideways range over the past 39 trading sessions, in line with the RSI range-shift framework.
Rupak De, Senior Technical Analyst at LKP Securities, points out that the Nifty 50 has recovered smartly but failed to reclaim the 20 EMA on the hourly chart, keeping the possibility of another decline alive. A positive divergence is visible on the hourly RSI, suggesting some improvement in momentum.
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Vaishali Patel, Deputy Manager - Research- Technical Department at Jainam, notes that the Nifty 50 has formed a Doji candle with a long lower shadow, indicating buying interest at lower levels. The index is currently trading near the gap zone formed on April 8.
Bank Nifty: Outperforming the Nifty 50
The Bank Nifty has outperformed the Nifty 50 over the past two trading sessions and is currently showing signs of base formation near its previous swing low. Sudeep Shah notes that the 54,500–54,600 zone will act as an important resistance area for the index, while Rupak De points out that the banking index has given a double-bottom breakout on the hourly chart, suggesting rising optimism around the banking space.
Vaishali Patel notes that the Bank Nifty has recovered from lower levels and formed a long lower shadow on the daily chart, reflecting buying interest near support zones.
Key Resistance and Support Levels
| Index | Key Resistance | Key Support |
|---|---|---|
| Nifty 50 | 23,550, 23,600 | 23,150, 23,100 |
| Bank Nifty | 54,500, 54,600 | 53,100, 53,000 |
Trading Strategies
| Analyst | Strategy | Stop-Loss | Target |
|---|---|---|---|
| Sudeep Shah | Sell Nifty Futures below 23,450 | 23,600 | 23,150 |
| Rupak De | Buy Nifty 23,300 PE of the June 9 expiry | 84 | 165 |
| Vaishali Patel | Buy Nifty Futures above 23,600–23,650 | 23,350 | 23,850 |
| Sudeep Shah | Sell Bank Nifty Futures below 54,350 | 54,700 | 53,700 |
| Rupak De | Buy Bank Nifty 55,000 CE of the June expiry | 774 | 1,000 |
| Vaishali Patel | Buy Bank Nifty Futures around 54,350–54,200 | 53,600 | 55,500 |
Investor Takeaway
The market remains range-bound, and a decisive break above or below the current range is required for trend confirmation.
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