Nifty 50 Surges 1.11% to 23,409 Amid Ongoing Middle East Tensions

The Nifty 50 index rebounded with a gain of 1.11% on March 16, marking a good start to the week after a three-day losing streak. This was in line with expectations as momentum indicators and oscillators had entered extremely oversold territory, and the India VIX cooled off slightly.

Market Outlook

The overall trend remains favorable for bears, with experts advising a sell-on-rally strategy due to oil prices staying above $100 a barrel. To take the benchmark index convincingly beyond the 24,000-24,100 zone, follow-up buying interest will be needed in the upcoming sessions. Above this level, a further rally could be seen. Immediate resistance is placed at 23,500-23,800, while 23,000-22,950 can act as immediate support.

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

Technical Analysis

The Nifty 50 formed a long green candle with minor upper and lower shadows on the daily chart, indicating a counterattack by bulls from the lower supports. This means the index climbed back above the long bullish gap (22,924-23,207). However, the underlying broader trend remains weak, and the market is still not out of the woods.

Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD)

The RSI was slightly below 30, though it rebounded to 29.68 from 24.15 in the previous session. The MACD remained well below the reference and zero lines, while the histogram sustained below the zero line, although the weakness faded slightly.

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

Nifty Bank

The Nifty Bank index also snapped a three-day losing streak and rallied 1.22% to 54,413. The index formed a bullish candle with upper and lower shadows on the daily timeframe, indicating a sharp rebound from lower levels amid volatility. However, the trend still favors bears as the lower-high, lower-low structure remains intact.

Resistance and Support Levels

For the Nifty 50, the 23,500-23,600 levels act as a crucial overhead resistance, and there is a higher possibility of a sell-on-rise opportunity in the market at this hurdle. Immediate support is placed at the 23,000 level.

For the Nifty Bank, the 54,900-55,000 zone will act as a key hurdle for the index. A sustained move above 55,000 could extend the pullback rally towards the 55,500 level. On the downside, the 54,000-53,900 zone is expected to serve as a crucial support level.