Israel-Iran escalating tension to trigger correction in equities? Check Nifty, Bank Nifty levels to watch

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In the short term, market volatility is expected, although, in the long term, it signifies a trend toward more accommodating central banks. "This presents a significant opportunity for domestic hotel players, as increased focus on domestic travel and the domestic market is anticipated due to the indefinite deferral of the Mauritius treaty change," said Ajay Srivastava of Dimensions Corporate.

Chandan Taparia- VP -Derivative & Technical Analyst- Motilal Oswal Financial Services believes that investors should use declines as a buying opportunity as the major trend of the market is positive and SIP flow is supporting any meaningful declines to be bought.

"We believe this volatility or profit booking could add value to investors to bargain hunting their value stocks to built the basket for next leg of rally once it gets stability with softness in cross broader issues globally," he told Moneycontrol.

Nifty, Bank Nifty levels to watch

In the recent swing, Nifty rallied by more than 1,000 points. It rise from 2,1710 to 22,775 zones in the last 15 trading sessions. "Technically, key support is placed near 22,222 which is 50% retracement and previous key zones for the index," said Chandan Taparia of Motilal Oswal.

If the index fails to hold 22,222, then some more profit-booking could drag the index towards 21,700 zones. On the upside, the immediate hurdle is placed at 22,777, and above this level, the rally could extend to new high zones," Taparia added.

"On the index front, Nifty can slip further lower to the 22,150-22,350 zone. In case of a rebound, 22,700-22,800 would continue to act as a strong hurdle," he said, adding, "traders should continue with stock-specific approach and prefer hedged approach," said Ajit Mishra of Religare Broking.

Bank Nifty has witnessed some corrections after touching a high of 49,000. According to Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas, the crucial support level for the banking stands at 48,300 and below that at 47,820, while the immediate hurdle is placed at 49,000.

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There was a very clear negative divergence on the Nifty and Bank Nifty charts. This suggested that despite new highs, the markets didn't have enough strength to move higher, said Kush Bohra, Founder, Kushbohra.com.

"For Nifty, 22,000-22,200 is a near-term support zone to watch for. Similarly for the Bank Nifty, 47,200-47,500 is a support zone," he told Moneycontrol, adding, "If these levels are held, the buy-on-dips texture of the markets will remain intact in the near term."

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