Technical View: Nifty snaps 7-day rally, likely to consolidate further with crucial 24,000 support; VIX climbs above 16

Nifty Consolidation

The benchmark Nifty 50 remained under pressure for the major part of the session, closing a third of a percent lower due to profit booking on April 24—the monthly F&O expiry session—after recording a 1,960-point gain over the last seven consecutive sessions. This was on expected lines. The index traded within the previous day’s range while taking support at 24,200.

As long as the index defends the 24,000 level, which is the 50 percent Fibonacci retracement of the fall from 26,277 to 21,744, the possibility of a rebound after the ongoing consolidation remains high. On the higher side, it may face resistance in the 24,450–24,550 zone, according to experts.

The Nifty 50 opened lower at 24,278 and traded in a range-bound manner below the 24,300 zone after morning volatility. The index closed at 24,247, down 82 points, forming a small bearish candle with an upper shadow on the daily charts, indicating selling pressure at higher levels.

Jatin Gedia, Technical Research Analyst at Mirae Asset Sharekhan, believes that the Nifty has entered a consolidation phase. “The range of consolidation is likely to be 24,200–24,500. Sector rotation and stock-specific action are likely during this phase,” he said.

In terms of levels, according to him, the 24,000–23,970 zone will act as crucial support, while the 24,450–24,550 zone will act as stiff resistance.

As per the weekly options data, the maximum Call open interest was seen at the 25,000 strike, followed by the 24,500 and 24,300 strikes. Maximum Call writing was observed at the 25,000 strike, followed by the 24,800 and 25,200 strikes. On the Put side, the 24,000 strike holds the maximum open interest, followed by the 23,500 and 24,200 strikes, with maximum Put writing seen at the 23,500 strike, followed by the 24,000 and 24,200 strikes.

The above options data indicates that the Nifty may trade in the range of 24,000–24,500 in the short term.

Bank Nifty

The Bank Nifty extended its downtrend for the second consecutive session, falling 169 points to close at 55,201. It formed a small bullish candle with a long upper shadow on the daily timeframe, signaling pressure at higher levels.

“After early volatility, the index largely remained within the first 30 minutes’ range, signaling a phase of volatility contraction. This kind of price behaviour often precedes a directional move,” said Anshul Jain, Head of Research at Lakshmishree Investments.

He anticipates a dip in the coming session, with the index likely to retest its previous all-time high of 54,464. Once this support is tested, a fresh leg of the uptrend may resume, he believes.

Meanwhile, the rising India VIX—the fear gauge—above the 16 zone, signaled some caution for bulls. The VIX increased by 1.82 percent to 16.25 levels, extending upward journey for another session.