Markets likely to extend gains to 6th session: Key levels to watch today as Nifty approaches 23,500

The India VIX dropped to a fresh five-and-a-half-month low on Friday.

Frontline indices Nifty 50 and Sensex are likely to extend their winning streaks to see a sixth session of straight gains, as indicated by signals from GIFT Nifty. After seeing negative returns over the past five months, this gaining streak is set to cap the downward trend, with the Nifty higher by around 5.5 percent for the month of March so far.

The Nifty 50 soared to a six-week high due to a stupendous rally throughout the week, rising 0.7 percent on March 21 and 4.26 percent for the week (the biggest weekly gain since the first week of February 2021).

All major sectoral indices traded in positive territory, with the Capital Market and Defense indices leading the gains. The Capital Market index surged 14 percent, while the Defense index rose over 10 percent. The market cleared the short-term resistance at 22,700/75,000 during the week, and the breakout fueled further positive momentum. It also moved past the 20- and 50-day Simple Moving Averages (SMA), reinforcing the bullish trend.

On the weekly chart, the Nifty formed a strong bull candle with a higher high and higher low, indicating strength. The index closed decisively above the 52-week EMA and broke the falling supply line connecting the major highs of September and December 2024, further confirming bullish sentiment.

Here are key levels to watch out for in the March 24 trading session

For Nifty 50, experts believe that the 23,400-23,500 range is expected to be an immediate resistance zone, as a decisive close above it could open doors to 23,800, the key hurdle (February swing low). However, in the event of consolidation, the 23,100-23,000 range is likely to act as the support zone, as a fall below this level could bring bears into action.

For the Bank Nifty, it rallied over 5 percent last week and is currently trading comfortably above the 50,000 mark. For the trend, traders should consider 50,000 and 49,700 as key support zones, while the 200-day SMA at 51,000 and 51,300 could serve as crucial resistance areas for positional traders, said Amol Athawale, VP – Technical Research, Kotak Securities.

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, fell to 1.15 on March 21, against 1.16 in the previous session.  The increasing PCR, or being higher than 0.7 or surpassing 1, means traders are selling more Put options than Call options, which generally indicates the firming up of a bullish sentiment in the market. If the ratio falls below 0.7 or moves towards 0.5, then it indicates selling in Calls is higher than selling in Puts, reflecting a bearish mood in the market.

The India VIX, the fear gauge that measures expected market volatility, dropped to a fresh five-and-a-half-month low, declining 0.22 percent on Friday to 12.58, the lowest closing level since October 1, 2024. It has fallen consistently over the past five weeks, dropping 5.31 percent for the week.

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