The Nifty 50 extended its northward journey for the third consecutive session, driven by a late trade rally, and closed above all key moving averages, reclaiming the 200-day EMA (23,360) on April 16. This indicates potential for further upside in the upcoming sessions. The rally in banking and FMCG stocks supported the benchmark index, while a continued decline in India VIX provided additional comfort to the bulls.
Furthermore, the index surpassed the 78.6 percent Fibonacci retracement level (from the March high to April low), and the 5-day EMA crossed above the 10-day, 20-day, and 50-day EMAs in a single session on Wednesday. The index also sustained itself within the upper Bollinger Bands. Hence, a further rally toward 23,650 cannot be ruled out. Sustaining above this level could open the doors to 23,850–23,900, which is the zone of the previous swing high. On the downside, 23,200–23,100 is likely to act as the immediate support zone, according to experts.
The Nifty 50 opened higher at 23,344 and tested an intraday low of 23,273 amid rangebound trading. It gained momentum in the final hour, surpassing the 23,400 level to close at 23,437, up 109 points. This formed a bullish candlestick pattern with a minor lower shadow on the daily chart.
Jatin Gedia, Technical Research Analyst at Mirae Asset Sharekhan, believes the current upmove still has more steam left and is likely to continue toward 23,870 on the upside. He added that the upper end of the gap area, between 23,210 and 23,180, is expected to act as a strong support.
Weekly options data suggests that 24,000 is the key level to watch on the higher side, while 23,300 is likely to be immediate support for the index. The broader trading range is expected to be between 23,000 and 24,000 in the short term.
The maximum Call open interest was seen at the 24,000 strike, followed by the 24,500 and 23,500 strikes. Maximum Call writing was observed at the 23,450 strike, followed by 23,800 and 24,300 strikes. On the other hand, the 23,000 strike held the maximum Put open interest, followed by the 23,300 and 22,500 strikes. Maximum Put writing occurred at the 23,400 strike, followed by the 23,350 strike.
Bank Nifty
The Bank Nifty outperformed the Nifty 50, rising 738 points (1.41 percent) to close at 53,118 with above-average volumes. It hit the upper line of the Bollinger Bands and gave a breakout from long trendlines, all of which point to a healthy upward trend ahead. Additionally, a golden crossover occurred, with the 50-day EMA crossing above the 200-day EMA, indicating further upside potential.
According to Anshul Jain, Head of Research at Lakshmishree Investments, the Bank Nifty closed decisively above the crucial resistance level of 52,800, signaling strong bullish momentum. “The next upside target is 53,888, likely to be tested in the coming week. For the session ahead, immediate resistance is seen at 53,450. The breakout level of 52,800 will now act as a key support,” he said.
Meanwhile, the India VIX, which measures expected market volatility, continued its downtrend for the third straight day, declining 1.61 percent to close at 15.87. This added further confidence for the bulls.
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