The Nifty 50 remained directionless throughout session and closed flat after the Monetary Policy Committee has maintained repo rate at 6.5 percent for seventh consecutive meeting, on April 5. The index seems to have already discounted the RBI's decision and managed to hold above 22,500 for yet another session.
The index is expected to consolidate further in coming sessions with hurdle on the higher side at 22,700-22,800 levels if it manages to give strong closing above 22,600, while on the lower side, 22,400-22,300 is likely to be support area, experts said.
The Nifty 50 traded within the previous day's range and closed the rangebound session at 22,514, down 0.95 points, and formed small bodied bullish candlestick pattern with small upper & lower shadow on the daily charts, but the volume was pretty low compared to past three sessions.
"This market action signal narrow range movement in the market near new all-time highs. Having formed this pattern beside the negative candle of Thursday, the predictive value of the pattern could be less," Nagaraj Shetti, senior technical research analyst at HDFC Securities said.
On the weekly charts, the index ended at new closing high with 0.84 percent gains and has formed High Wave kind of candlestick pattern, indicating indecisiveness among bulls and bears about future market trend.
He feels the near-term trend of Nifty remains positive and the ongoing range movement in the market is suggesting a possibility of sharp swing movement on either side. Hence, a range expansion could be watched around 22,600 and 22,300 levels on either side.
Therefore, a decisive move above 22,600 levels could bring quick upside towards 22,800 levels and a slide below 22,300 levels is likely to open fresh round weakness from the highs, he said.
As per the weekly options data, the 23,000 strike owned the maximum Call open interest, followed by 23,500 strike and 22,800 strike, with meaningful Call writing at 22,800 strike, then 23,000 strike, while on the Put side, 22,500 strike owned the maximum open interest, followed by 21,500 strike and 22,400 strike, with writing at 22,400 strike, then 22,500 and 21,500 strikes.
The above options data indicated that 22,500 is expected to be crucial for the direction in the Nifty 50 in the near term, with hurdle on the higher side at 22,800 and support at 22,400-22,300 levels.
Bank Nifty
The Bank Nifty turned strong after the RBI policy and now jumped decisively above the falling resistance trendline, with continuation in higher highs, higher lows formation on the daily charts. The index rallied 432 points or 0.9 percent to 48,493 and now 143 points away from record high of 48,636 on December 28 last year.
The index has formed long bullish candlestick pattern on the daily charts.
"Bank Nifty has been outperforming and we expect the outperformance to continue. On the upside, the immediate hurdle is placed at 48,636 and above that the rally is likely to continue till 49,300," Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas said.
The zone of 47,700 – 47,500 shall act as a crucial support zone from short term perspective, he feels.
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