Nifty Faces Crucial Test to Reclaim Key Technical Threshold, Bank Nifty Support Level in Focus

Nifty 50 Snaps Two-Day Winning Streak, Market Participants Turn Cautious

The Nifty 50 index closed moderately lower on May 15, snapping its two-day winning streak. Despite opening higher and climbing to 23,839 during morning trade, the index turned negative in the last hour of the session and finished 46 points lower at 23,644. The index failed to close above the 10-day EMA, the 38.2 percent Fibonacci retracement of the April rally, as well as above the previous day's high, signaling weakness in the market.

Market participants may have turned cautious following rising bond yields, a weakening rupee, and fresh fuel price hikes, which revived inflation concerns. The 23,800–23,900 zone (10- and 20-day EMAs) is expected to remain crucial. Sustaining above this range alone can raise the possibility of the index moving upward towards the 24,000–24,100 levels. However, remaining below it may keep the index in a consolidative and range-bound phase, with 23,400 acting as crucial support, according to experts.

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Despite the pullback over the last three sessions, the index continues to trade below its key moving averages, reflecting underlying weakness. The DI- remains positioned above DI+ on the ADX indicator, suggesting that sellers continue to maintain an upper hand over buyers. Additionally, the MACD line remains below the zero line, while the RSI, at 45.13, sustained below the signal line, further reinforcing the prevailing bearish bias.

On the weekly timeframe, the index fell 2.2 percent after a couple of weeks of gains and formed a bearish candle with a long lower shadow, indicating weakness despite buying interest at lower levels. The index remained below all key moving averages (except the 200-day EMA) and also stayed below the 50 percent Fibonacci retracement of the April rally, signaling bearish sentiment.

Experts suggest that the index may witness renewed selling pressure if the Nifty falls below 23,500. A breach below this level could drag the index towards 23,150 and possibly lower levels. On the upside, 23,800 is expected to continue acting as a key short-term point of polarity.

The weekly options data suggested that 24,000 is expected to remain a crucial resistance level for the Nifty 50, while 23,500 is likely to act as immediate support, followed by 23,000 as a major support level. The maximum Call open interest was seen at the 24,000 strike, followed by the 23,800 and 24,300 strikes, while the 23,000 strike held the maximum Put open interest, followed by the 23,500 and 23,400 strikes.

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Meanwhile, the India VIX, which measures expected market volatility, rose 0.95 percent to 18.79 and remained above all key moving averages, indicating some discomfort for bulls. A decisive fall below the 18 zone is required for bulls to gain further comfort.

Bank Nifty Underperforms Benchmark Nifty 50

The banking index underperformed the benchmark Nifty 50, falling 419 points (0.77 percent) to 53,710 and forming a bearish candle on the daily charts. The index managed to sustain above the 50 percent Fibonacci retracement of the April rally for another session but remained below all key moving averages, all of which continued to trend downward.

The RSI dropped to 41.6 and remained below the signal line, while the MACD stayed below both the reference and zero lines, accompanied by a dark red histogram bar. All this indicates persistent weakness in momentum and trend.

For the week, the Bank Nifty shed 2.89 percent and formed a long red candle with a minor lower shadow on the weekly charts. Experts suggest that the immediate support for Bank Nifty is placed in the 53,300–53,200 zone. Any sustainable move below this zone could result in Bank Nifty extending its weakness towards 52,800, followed by 52,400 in the short term.