Nifty 50 Gains Momentum as VIX Drops for Third Consecutive Day; Key Levels of 23,800 and 56,000 in Focus for Bank Nifty

Nifty 50 Extends Recovery Amid Falling VIX

The Nifty 50 continued its upward trend, rising 0.8 percent to 23,778 on March 18, despite elevated oil prices due to tensions in the Strait of Hormuz. The index has now closed above the previous day's high for the second straight session, indicating a strong upward momentum.

The Nifty 50 may move towards the 24,000-24,100 zone in the next few sessions, provided it closes above and sustains 23,800 in the following session. Immediate support is placed at 23,600-23,500, according to experts. The index opened higher above 23,600 and stayed in positive territory throughout the session, hitting an intraday high of 23,862 before closing at 23,778, up 197 points (0.83 percent).

Momentum indicators still need to align with the rally. The RSI has recovered from the recent low of 24 to 37.04, but is yet to reclaim the 40 mark. The DI- remains comfortably above DI+, highlighting continued bearish dominance, while the MACD line is still below both the zero line and the signal line, though it has started to incline upward after a month.

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HDFC Securities' Senior Technical Research Analyst, Nagaraj Shetti, noted that the Nifty 50 is witnessing a sharp bounce back from the lows, signaling the chances of a higher bottom formation during any short-term consolidation or dip. A further sustainable up move from here could open the next upside target of around 24,000-24,200 levels in the near term. Immediate support is placed at 23,550, he added.

Weekly options data suggest that the Nifty 50 is likely to trade in the 23,500-24,000 range in the short term, with an immediate hurdle at 23,800 and support at 23,700. The maximum Call open interest is placed at the 24,500 strike, followed by the 24,000 and 23,800 strikes, while the maximum Call writing is seen at the 23,800, 23,700, and 24,500 strikes.

India VIX, the fear gauge, fell 5.4 percent to 18.72, extending its downtrend for the third consecutive session and signaling increasing comfort for bulls. It has corrected nearly 19 percent over the last three days. A fall and sustained move convincingly below the 18 zone could add further comfort for bulls, while stronger support will be seen only if it drops below the 13 zone.

Bank Nifty also played a key role in Wednesday's rally, rising 0.82 percent to 55,326. It formed a bullish candle with minor upper and lower shadows on the daily charts, indicating a positive bias despite some volatility. Bank Nifty extended its recovery for the third straight day, closing above the previous high and sustaining above the 50 percent Fibonacci retracement (of the rally from the March 2025 low to the February 2026 high) for another session.

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The improvement is also reflected in momentum indicators. The RSI rose to 35.11 and is on the verge of a bullish crossover, while the Stochastic RSI maintained a positive crossover. The MACD has inclined upward after nearly a month, though it remains below the reference and zero lines, while histogram weakness has faded for the third session.

SBI Securities' Head of Technical and Derivatives Research, Sudeep Shah, noted that sustaining this pullback is crucial, as any sharp reversal candle could halt the recovery and push the index lower again. Immediate resistance is placed in the 55,600-55,700 zone. Any sustainable move above this zone could push Bank Nifty toward 56,000, followed by 56,300 in the short term. On the downside, the 55,000-54,900 zone is likely to act as strong support, he said.