Technical View: Rangebound trade with negative bias likely to continue in Nifty, VIX remains at elevated levels

Nifty Technical View

The Nifty 50 remained within the 100-110 point range throughout the session, with a negative bias, and closed six-tenths of a percent down on April 9, the weekly F&O expiry day, after the RBI MPC, as expected, announced a 25-basis point repo rate cut along with a lowering of the inflation and growth forecast for the full year to 4% and 6.5%, respectively. Weak global cues, amid the beginning of the reciprocal tariff plan by the US and the likely announcement of further countermeasures from China after the US imposed a 104% tariff, weighed on sentiment.

Hence, experts expect consolidation and rangebound trading to continue in the upcoming sessions, with support at 22,270. Below this level, the downtrend may extend to 22,000, which is the key support zone. On the higher side, 22,700 is the immediate resistance (the high of April 8), followed by the crucial hurdle of 22,850 (upper end of bearish gap of April 7).

The Nifty 50 traded lower throughout the session and finished at 22,399, down 137 points. It formed a small bearish candlestick pattern, resembling an inside bar formation on the daily charts, indicating rangebound action.

"After a sharp upside recovery from the lows of 21,750 recently, the Nifty’s choppy movement now is not alarming for the short-term uptrend of the market," Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, said.

According to him, the immediate support is placed at 22,270, and the next crucial overhead resistance to watch is around the 22,700 level.

The weekly options data suggested that the trading range for the Nifty 50 may remain between 22,000 and 23,000.

On the Call side, the maximum Call open interest was seen at the 23,500 strike, followed by the 23,000 and 22,500 strikes. The maximum Call writing was at the 23,500 strike, followed by the 23,000 and 22,400 strikes. On the Put front, the 22,500 strike holds the maximum open interest, followed by the 22,000 and 22,400 strikes, with the maximum writing at the 22,400 strike, followed by the 22,000 and 22,500 strikes.

Bank Nifty

The Bank Nifty failed to hold on to the 50,500 level and formed a bearish candlestick pattern with a long lower shadow on the daily timeframe, indicating buying interest at lower levels. The index reduced its losses by 329 points and closed at 50,240, down 271 points.

"A breach above Wednesday’s high of 50,500 could trigger sharp short covering, potentially leading the Nifty higher," Anshul Jain, Head of Research at Lakshmishree Investments, said.

Notably, the index managed to reclaim both the daily and weekly VWAP (volume-weighted average price) towards the close, indicating underlying accumulation. This setup increases the likelihood of a gap-up opening, which could intensify the short-covering rally and shift momentum firmly in the bulls’ favour, he believes.

However, the India VIX, the fear gauge, remained elevated, suggesting caution for bulls until it decisively falls below the 14 mark. It was up 4.83 percent at the 21.43 zone.