Technical View: Nifty needs to break 23,100-23,400 range for directional move, Bank Nifty outshines with sharp recovery

Nifty Trend

The Nifty 50 slipped into the red on April 3 after a day of decent upside bounce, closing 0.3% lower following the reciprocal tariffs announced by US President Donald Trump. However, the index defended the 23,100-23,140 range (38.2% Fibonacci retracement from the March low to high) for the third consecutive session. Hence, consolidation is likely to continue with 23,100 acting as support. On the higher side, 23,350-23,400 is expected to be the immediate hurdle. Above this, the 23,650-23,800 zone is to watch, according to experts.

The Nifty 50 opened lower by more than 150 points at 23,150. The index trimmed around 100 points of losses in the first hour of trade and remained in a 50-60-point range with a negative bias for the remainder of the session. It finished at 23,268, down 65 points, and formed a bullish candlestick pattern with a minor upper shadow on the daily charts, as the closing was higher than the opening levels.

Technically, Thursday's market action indicates a rangebound movement in the market with a weak bias. This signals that the crucial global event has passed without any major damage to the underlying trend of the market, according to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

He added that the Nifty is in the process of forming a new higher bottom reversal pattern around the support at 23,100 levels. A sustainable move above the hurdle of 23,350 could change the trend and pull the Nifty towards the next overhead resistance of around 23,650 levels in the near term, he said.

The weekly options data suggested that the Nifty 50 is expected to trade within the range of 23,000-23,500 in the near term.

The maximum call open interest was observed at the 24,000 strike, followed by the 23,500 and 23,300 strikes, with the maximum call writing at the 24,000 strike, followed by the 23,300 and 23,600 strikes. On the put side, the 23,000 strike holds the maximum open interest, followed by the 22,800 and 22,500 strikes, with the maximum writing at the 22,800 strike, and then the 23,000 and 22,500 strikes.

Bank Nifty

The Bank Nifty outperformed the benchmark Nifty 50, showing a recovery of nearly 700 points before closing 173 points higher at 51,521, with strong volumes and forming a long bullish candlestick pattern on the daily timeframe, signaling a healthy trend. Furthermore, the index traded well above all key moving averages (10, 20, 50, 100, and 200-day EMAs), with a positive bias in the momentum indicators RSI and MACD.

The index has been stuck in a range between the 50,750 to 52,000 zones for the last seven sessions and is likely to oscillate within this broader range, said Chandan Taparia, Senior Vice President, Head of Technical Research and Derivatives at Motilal Oswal Financial Services.

According to him, the banking index now needs to hold above the 51,250 zone for an up move towards 52,000, and then 52,250 zones, while on the downside, support is seen at 51,250, then 51,000 levels.

Meanwhile, the India VIX, the fear gauge, fell further by 0.89% to the 13.6 zone but still sustained above short-term moving averages (5, 10, and 20-day EMAs). Hence, the bulls need to be cautious unless the VIX drops decisively below the 13 mark.