Technical Analysis: Nifty 50 and Bank Nifty Suggest Ongoing Market Caution

Market Update: Nifty 50 Fails to Witness Follow-Through Buying

The Nifty 50 failed to witness follow-through buying and closed with a loss of more than one-tenth of a percent on May 19, during the weekly F&O expiry session. The index continued to trade below short-term moving averages, both of which trended downward, while it also failed to close above the 38.2 percent Fibonacci retracement level of the April rally, amid a consistent bearish crossover in momentum indicators.

In order for the Nifty 50 to close and sustain above the 20-day EMA (23,835) for a trend reversal in favor of the bulls, it is crucial for the index to close above this level. However, sustaining below the 20 DEMA may keep the market in a consolidative phase, with 23,400 acting as the immediate crucial support, according to experts.

The Nifty 50 opened higher at 23,675 and climbed to 23,782 in morning trade amid volatility. However, the index lost all its gains in late trade and closed 32 points lower at 23,618.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Daily Chart Analysis

On the daily charts, the index formed a bearish candle with an upper shadow, indicating weakness and hesitation to sustain at higher levels due to selling pressure. The RSI at 44.70 remained sideways below the signal line, while the MACD also stayed below the zero and reference lines, although the bearish histogram bars have been shrinking for the fourth straight day. All these indicators suggest continued weakness in momentum.

Market Sentiment

The overall sentiment is likely to remain tilted in favor of the bears in the short term. The 23,800 zone continues to act as a crucial resistance level, and unless the index decisively moves above it, sellers may regain control at any point.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Immediate Support and Resistance

On the downside, immediate support is placed at 23,400, below which selling pressure could intensify further. The 23,800 zone continues to act as a crucial resistance level.

Options Data

The monthly options data suggested that 23,700 is expected to be the immediate resistance for the Nifty 50, followed by 24,000 as a crucial hurdle, while 23,000 remains a key support level.

India VIX

The India VIX, which measures expected market volatility, remained range-bound below the 20 level, falling 4.87 percent to 18.67. As long as it sustains above the 17 mark, bulls may not be completely comfortable.

Bank Nifty

The banking index traded within a narrow range of 433 points, marking its lowest daily range since February 2026, before closing at 53,409, down 128 points (0.24 percent). The index failed to close above the 50 percent Fibonacci retracement level of the April rally due to pressure at higher levels, signalling weakness.

Daily Chart Analysis - Bank Nifty

On the daily chart, it formed a small-bodied red candle with an upper wick, indicating a lack of strong directional conviction and subdued price action.

Despite this consolidation, the broader trend of the index remains weak, as it continues to trade below its key moving averages. Adding to the negative bias, the daily RSI has slipped to the 40 mark and the MACD maintained a sell crossover, suggesting weakening momentum and persistent selling pressure.

Immediate Support and Resistance - Bank Nifty

"The 53,100–53,000 zone is expected to provide crucial support. A decisive break below the 53,000 level could further intensify selling pressure, dragging the index towards the next key support around 52,500," said Sudeep Shah.

However, the 53,900–54,000 zone is likely to act as immediate resistance, he added.