Technical View: Nifty 50 Faces Pressure Amid Uptrend; Bank Nifty Vulnerable Below 55,000

Nifty 50 Slips into Weakness Amid Choppy Trade

The Nifty 50 failed to witness follow-up buying interest, slipping into weakness as it gave up some of the previous day's gains on April 28, marking a negative close on the F&O expiry session. Weak domestic and global cues weighed on the market, preventing the index from reclaiming the 50-day EMA. Despite this, the Nifty 50 managed to defend the 20-day EMA (23,950) and hold above the previous week's low of 23,800, which is expected to act as key support in the upcoming sessions.

The 24,200 level (50-day EMA) is likely to be the immediate resistance zone for the Nifty 50. Sustaining above this level could increase the possibility of the index moving upward toward the 24,350-24,500 range (the upper end of the bearish gap of April 23 and a psychological level), according to experts.

The Nifty 50 opened moderately lower on the day, bouncing back and moving closer to 24,200 intraday, but lost all its gains in late morning deals and traded lower for the remainder of the session. The index fell 97 points (0.40 percent) to close at 23,996.

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Bearish Candle Forms on Daily Charts

On the daily charts, the Nifty 50 formed a bearish candle with a long upper shadow and remained within Friday's trading range, indicating profit booking at higher levels and range-bound trading. Over the past four sessions, the index has consistently failed to sustain its highs, as reflected by repeated upper wicks, signaling a strong supply zone overhead.

Technical Analysis

According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, the short-term uptrend remains intact, and the Nifty appears to have formed a higher bottom at 23,813 on April 24. A decisive move above the immediate resistance of 24,200 could bring bulls back into action. However, immediate support is placed at the 23,800 level, he added.

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Weekly Options Data

The weekly options data suggests that 24,000 is expected to be a crucial zone for determining further direction in the Nifty 50, with a broader trading range of 23,500-24,500 levels. The maximum Call open interest is placed at the 24,500 strike, which is expected to be a critical resistance level for a sharp upmove, followed by the 24,000 and 24,200 strikes. Maximum Call writing is also seen at similar strikes.

On the Put side, the 24,000 strike holds the maximum Put open interest, followed by the 23,500 and 23,600 strikes, with maximum Put writing observed at similar levels.

India VIX Extends Downtrend

Meanwhile, the India VIX, the fear gauge, extended its downtrend for another session, falling 1.8 percent to 18.05 and sustaining below short- and medium-term moving averages. For bulls to regain momentum, it is necessary for the VIX to decline toward the 16-15 levels.

Bank Nifty Plummets Sharply

The banking index, Bank Nifty, reversed all its previous day's gains and plummeted sharply by 864 points (1.54 percent) to 55,400 on the monthly F&O expiry day, underperforming the benchmark Nifty 50. The index traded lower throughout the session and closed below its previous week's low.

Bearish Candle Forms on Daily Timeframe

On the daily timeframe, the Bank Nifty formed a bearish candle with an upper shadow and fell below the 20-day EMA (55,650), indicating weakness and selling pressure at higher levels. With Tuesday's fall, the index traded below all key moving averages as well as below the 23.6 percent Fibonacci retracement level of the recent April rally. The RSI dropped below the 50 mark to 48.44. The MACD turned lower, though it remained above the reference and zero lines, while the green histogram bars have continued to shrink for the past week. All these indicators point to weakening momentum.

Technical Analysis

According to Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities, immediate support for Bank Nifty is placed in the 54,900-54,800 zone. Any sustained move below this zone could extend the weakness toward 54,400, followed by 54,000 in the short term. On the upside, the 55,900-56,000 zone is likely to act as immediate resistance, he added.