Nifty Maintains Momentum Above 23,800: Analysts Weigh Prospects for Market Breakout
Indian Markets Experience Volatility as Nifty 50 Trades Above 23,800
The Benchmark index Nifty 50 was trading above 23,800 on May 22, amid a volatile market. This has raised questions about whether markets are heading for a breakout or if the rally will lose its steam soon. Analysts have stated that a decisive close above the 23,800 zone is necessary for markets to gain bullish momentum.
The 20-day Simple Moving Average (SMA) stands at 23,891. As of 1:35 pm on May 22, the Sensex was up 545.96 points or 0.73% at 75,729.32, and the Nifty was up 159.35 points or 0.67% at 23,814.05. Approximately 2,151 shares advanced, 1,574 shares declined, and 146 shares were unchanged.
| Market Indicator | May 22 |
|---|---|
| Sensex | 75,729.32 (up 545.96 points or 0.73%) |
| Nifty | 23,814.05 (up 159.35 points or 0.67%) |
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According to analysts, the 23,900-24,000 zone is expected to act as strong resistance, with 24,000 serving as the highest call-writing base. On the downside, 23,500 remains a crucial support level due to heavy put-writing activity. A break below this level could trigger put unwinding and increase downside pressure towards the 23,400 zone. Overall, markets are likely to remain highly sensitive to developments around the US-Iran deal.
Some analysts believe that Nifty could make a move towards 23,430 as long as it remains above 23,600. The sharp turn lower yesterday from 23,860 reminds us that the trading range that persisted over the previous seven days remains. However, despite the disappointing close, Nifty succeeded in closing above the 10-day SMA for the first time since May 8. This encourages a positive outlook for the day, with a breakout move aiming for 23,900-24,430. Alternatively, inability to float above 23,600 will negate such hopes, though a collapse is less expected.
Derivatives data showed notable call writing at 23,700-23,800 strikes, while put writing remained concentrated at 23,600-23,500 levels. Immediate support is placed around the 23,500-23,550 zone, while resistance is seen near the 23,850-23,900 range.
| Market Analysis | |
|---|---|
| Call Writing | Notable at 23,700-23,800 strikes |
| Put Writing | Concentrated at 23,600-23,500 levels |
| Immediate Support | 23,500-23,550 zone |
| Resistance | 23,850-23,900 range |
Investor Takeaway
A decisive close above 23,800 is needed for markets to gain bullish momentum.
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