Technical View: Non-directional activity likely to continue, bears may turn strong if Nifty decisively breaks 24,700

Nifty Trend

The Nifty 50 shed around half of its previous day’s gains and closed 0.56 percent lower on June 23, marking a negative start to the F&O expiry week, which is expected to remain volatile. After a gap-down opening, the index stayed rangebound, taking support at 24,800 (near the day’s low), which is likely to be a key level to watch in the upcoming session. This is followed by the crucial support area at 24,700, below which bears may intensify their activity. On the upside, the 25,100–25,200 zone is likely to act as a resistance, according to experts.

The Nifty 50 opened lower by 173 points at 24,940 and corrected to 24,825, marking the day’s low. The index showed signs of recovery toward the end of the initial hour of trading and hit an intraday high of 25,057 in the latter half of the session, before closing 141 points down at 24,972. It traded within the previous day’s range and formed a small bullish candle with long upper and lower shadows, resembling a high wave pattern on the daily charts, indicating volatility and indecision among bulls and bears.

Technically, this market action also suggests the presence of a strong hurdle around the 25,100–25,200 levels, which has been a broad high-low range for the Nifty over the past month.

“As long as the Nifty stays below the hurdle of 25,100–25,200 levels, there is a possibility of choppiness in the market. A decisive move above this hurdle could only open renewed buying enthusiasm,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

According to him, further consolidation from here could find strong support around the 24,800 level.

Options Data Overview

Monthly options data suggest that the Nifty may face resistance in the 25,000–25,200 zone in the short term, with support seen around the 24,900 level.

The maximum Call open interest was observed at the 25,000 strike, followed by the 25,500 and 25,200 strikes, with the highest Call writing at the 25,000 strike, followed by the 24,900 and 25,450 strikes.

On the Put side, the 24,000 strike holds the maximum open interest, followed by the 25,000 and 24,900 strikes. The highest Put writing was at the 24,900 strike, followed by the 24,600 and 24,000 strikes.

Bank Nifty

The Bank Nifty also corrected but managed to hold above the 56,000 mark on a closing basis. It declined by 194 points to close at 56,059. The banking benchmark index, like the Nifty, traded within the previous day’s range and formed a bullish candle on the daily timeframe, albeit with low volumes.

“The banking index has to hold above the 56,000 zone for an up move towards 56,350, then 56,500 levels. On the downside, support is seen at 55,750, followed by 55,555 zones,” said Chandan Taparia, Head – Technical Research and Derivatives at Motilal Oswal Financial Services.

India VIX

Meanwhile, the India VIX — the fear gauge — snapped a five-day losing streak and rose by 2.74 percent to 14.05 levels. Despite the rise, it remains below the 15 mark, which is considered supportive for the bulls.