Nifty Under Pressure: Key Support Level at 23,100 as Market Sentiment Remains Bearish

Nifty 50 Closes Higher, but Bears Continue to Hold the Upper Hand

The Nifty 50 index closed higher for the first time in five consecutive sessions on May 13, but the technical indicators suggest that bears still have the upper hand. Despite the moderate gains, the index remains under pressure due to elevated oil prices, a record low rupee against the US dollar, and persistent FII selling in Indian equities.

The Nifty 50 managed to breach the 23,400 level, which is the 50 percent Fibonacci retracement of the April rally. However, sustainability remains a key factor to watch, as a failure to hold above this level could drag the index down to the 23,200-23,100 zone in the upcoming sessions. According to experts, if the index stays above 23,400, the 23,600-23,700 zone can act as a hurdle on the higher side.

On the daily timeframe, the index formed a small-bodied bullish candle with a long upper shadow and a minor lower shadow, indicating pressure at higher levels despite some buying interest emerging at lower zones. However, the index remained well below all key moving averages, with the RSI recovering slightly to 40.52 but remaining below the signal line. The MACD also stayed below both the zero line and the signal line, with the histogram's red bars expanding further.

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Key Technical Indicators

According to Rajesh Bhosale of Angel One, the next key support for the Nifty 50 is placed near 23,100, which coincides with the 61.8 percent retracement of the same rally. He advises traders to avoid aggressive long positions until clear signs of a bullish resumption emerge.

In the short term, the Nifty 50 is expected to trade in the broad range of 23,000-24,000, where the maximum Put and Call open interest is concentrated. A decisive move on either side of this range could provide a firm directional cue. Meanwhile, the fear index, India VIX, rose marginally by 0.75 percent to 19.43 and remained well above all key moving averages, signalling caution for bulls.

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Bank Nifty Remains Under Pressure

The Bank Nifty index remained under pressure and declined by 99 points to 53,456, extending its downtrend for the fourth consecutive session. The index continued to underperform the Nifty 50 and stayed below the 50 percent Fibonacci retracement level of the April rally (i.e., below 53,700).

On the daily charts, the Bank Nifty formed a small-bodied bearish candle with a long upper wick and a minor lower shadow, indicating hesitation and selling pressure at higher levels despite some buying interest at lower levels. The index stayed below all key moving averages, which also continued to trend downward.

Key Support and Resistance Levels

According to Sudeep Shah, the immediate support for Bank Nifty is placed in the 53,100-53,000 zone. Any sustainable move below this zone could result in Bank Nifty extending its weakness towards 52,600, followed by 52,300 in the short term. On the upside, the immediate resistance for the index is placed in the 53,800-53,900 zone.