Technical View: Doji-like pattern formation signals consolidation in Nifty 50, Bank Nifty moves closer to 56,000

NIfty Consolidation

The Nifty 50 took a breather after strong upmoves in the last five consecutive sessions and closed moderately higher on April 22, while the relentless buying interest continued in banking stocks, taking the Bank Nifty to uncharted territory. Overall, the trend remains positive given the strong technical indicators and the index sustaining above the 50 percent Fibonacci retracement. However, experts believe some consolidation can't be ruled out in the near term considering the Doji-like formation at highs, after the robust run in the past few sessions.

After initial volatility, the Nifty 50 gained some strength and remained higher to hit an intraday high of 24,243, the highest level since December 18, 2024. The index saw some profit booking in the latter part of the session and finished at 24,167 (the highest closing level since January 2), up 42 points (0.17 percent).

The index formed a small red candle with upper and lower shadows, resembling a Doji-like candlestick pattern on the daily charts, signaling indecision among the bulls at higher levels.

Hence, more consolidation or a minor dip can’t be ruled out in the short term, said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

The Nifty is unable to sustain above the immediate resistance of 24,200 (the lower high of January 2) despite breaching it on Tuesday. "Having surged significantly over the last 7–8 sessions, a cooling off of the trend or a minor dip is expected in the coming sessions before further upside," Nagaraj said.

According to him, immediate support is placed at the 24,000 level; however, a decisive move above 24,250 could open the next upside towards 24,550 (the 61.8 percent Fibonacci retracement from the September 2024 high to the April 2025 low).

As per the monthly options data, the maximum Call open interest is placed at the 25,000 strike, which is expected to be a key resistance zone in the medium term, followed by the 24,500 and 24,200 strikes. The maximum Call writing is at the 24,400 strike, followed by the 24,200 and 25,000 strikes.

On the Put side, the 24,000 strike holds the maximum open interest, which is likely to act as a key support zone for the index, followed by the 23,500 and 24,100 strikes. The maximum Put writing is at the 24,200 strike, followed by the 24,000 and 24,100 strikes.

The near term resistance zones, as per the above data, are expected to be 24,200 and 24,500.

Bank Nifty

The Bank Nifty maintained its upward rally, rising 343 points (0.62 percent) to end at a new closing high of 55,647. The index jumped closer to 56,000 by hitting an intraday record high of 55,961 and formed a bullish candlestick pattern with a long upper shadow on the daily timeframe, signaling pressure at higher levels.

This pattern formation also resembled a Shooting Star candle, though the body is slightly larger than ideal. "While it hit an all-time high, lower timeframes showed signs of fading momentum in the final hour. For the session ahead, support at 55,300 is critical—any breach below this level could trigger sharp profit booking, dragging the index down toward 54,400," said Anshul Jain, Head of Research at Lakshmishree Investments.

Bulls must defend this zone to maintain short-term control and avoid deeper retracement, according to him.

Meanwhile, the India VIX, the fear index, sustained below the 16 mark, closing 1.84 percent lower at 15.23, which is favourable for bulls. The index remained below short-term moving averages (5, 10, and 20-day EMAs).

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