Technical Analysis Suggests Market Stability, Further Upside for Nifty 50 Hinges on 24,350, Bank Nifty Faces Key Resistance at 56,200

Nifty 50 Sees a Strong Rebound, But Faces Resistance

The Nifty 50 experienced a significant rebound after a day of profit booking, rallying sharply towards 24,350 to fill the bearish gap of April 23, but ultimately failed to sustain all its gains towards the end. The index lost 157 points from its day's high and closed with an 8-tenths of a percent gain on April 29, marking a positive start to the May series despite geopolitical uncertainty, a weakening rupee, and elevated oil prices.

Key Levels to Watch

The benchmark Nifty 50 needs to convincingly surpass and sustain above the 24,350 zone for a further move towards the 24,500-24,600 hurdle. Until then, consolidation with range-bound trading may be seen in the market, with support placed at 24,000-23,950, according to experts.

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Market Performance

The Nifty 50 opened higher, near 24,100, and remained in positive territory throughout the session. The index climbed to 24,335 before witnessing some profit booking from higher levels and closed at 24,178, up 182 points (0.76 percent).

Technical Analysis

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The Nifty 50 could not sustain above the 50 percent Fibonacci retracement of the fall from the February to April low, as well as the 50-day EMA, but it closed above the short-term moving averages (10- and 20-day EMAs). The RSI inched up to 53.19 but remained slightly below the reference line, while the MACD stayed above the signal and zero lines; however, the histogram's green bars faded for the eighth consecutive session. All this indicates a cautiously positive trend with weakening momentum.

Daily and Intraday Charts

On the daily charts, the Nifty 50 formed a bullish candle with an upper shadow, indicating a positive trend with selling pressure at higher levels, while the higher high-higher low formation remains intact as long as the index stays above its crucial support of 23,800. On the intraday charts, such as the 60-minute timeframe, the Nifty has formed a bullish pattern of higher tops and higher bottoms, which is a positive indication.

Expert Analysis

According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, the underlying trend of the Nifty remains positive amid volatility. On the upside, the market may encounter further resistance around 24,400-24,500 before breaking out of the hurdle. Immediate support is placed at the 24,000 level, he said.

Options Data

The weekly options data continues to indicate that 24,500 is expected to be a crucial resistance level for the Nifty 50, as it has the maximum Call open interest. The 24,000 level is likely to be immediate support, as it has the maximum Put open interest. Hence, a decisive break of either of these levels could give a firm direction to the index.

India VIX

Meanwhile, India VIX, the fear gauge, fell 3.38 percent to 17.44, extending its downtrend for the third consecutive session and signaling a gradual increase in comfort for bulls. It is necessary for the VIX to drop below the 15 zone for further stability and confidence among bulls.

Bank Nifty

The banking index underperformed the benchmark Nifty 50 for another session, rising just 3.25 points to 55,404 amid range-bound and volatile trading. The index formed a small bearish candle with a noticeable upper wick and a small lower wick, highlighting its continued inability to hold higher levels.

Immediate Support and Resistance

Notably, this marks the sixth instance in the last 11 sessions where the banking index has rallied intraday but failed to sustain gains, resulting in prominent upper wicks on the charts. "Going ahead, the immediate support for Bank Nifty is placed in the 55,000-54,900 zone. Any sustained move below this zone could result in Bank Nifty extending its weakness towards 54,600, followed by 54,300 in the short term," said Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities.