The Indian equity markets are poised for a sluggish start this Tuesday, as the benchmark indices, Sensex and Nifty 50, are expected to open lower, reflecting mixed signals from global markets. With the GIFT Nifty indicating a gap-down opening, it’s trading at around 23,461, showing a discount of nearly 176 points from the previous Nifty futures close. This dip follows a market closure on Monday, March 31, in observance of Eid-ul-Fitr.

Market Recap: Previous Trading Session Insights

On the last trading day, the domestic equity market faced profit booking, resulting in the Nifty 50 maintaining the 23,500 level. The Sensex experienced a decline of 191.51 points, closing at 77,414.92, which translates to a drop of 0.25%. Meanwhile, the Nifty 50 finished down by 72.60 points, settling at 23,519.35.

What Lies Ahead for Nifty 50 and Bank Nifty?

Nifty 50 Outlook

Current Open Interest (OI) data for the Nifty 50 reveals resistance levels at 23,600 and 24,000, while strong support lies at 23,300. A breakthrough past 23,800 could signal a strong upward movement, making these levels crucial for traders to monitor.

• Recent performance indicates the Nifty 50 has slipped into a weaker phase, with a notable drop of 72 points on March 28.
• According to Nagaraj Shetti, a Senior Technical Research Analyst at HDFC Securities, the formation of a negative candle suggests that bullish momentum has stalled. The market could experience range-bound action between 23,650 and 23,400.
• Immediate support is positioned around 23,400, which corresponds to the 200-day Exponential Moving Average (EMA). The overhead resistance to watch is at 23,650, with an additional level at 23,850 for this week.

Technical Analysis Insights

Om Mehra, a technical analyst at SAMCO Securities, observed that the Nifty 50 index has shown resilience, gaining 0.72% weekly and a robust 6.30% monthly return. The index is comfortably above the 20, 50, and 100 EMAs, with the daily Relative Strength Index (RSI) remaining above 60, indicating persistent strength.

• Minor support is noted at the 23.6% Fibonacci retracement level of 23,500, while a stronger cushion exists at 23,280.
• The index may need some time to consolidate before making its next significant move.

Key Levels to Monitor

• Support Levels: 23,415, 23,300
• Resistance Levels: 23,600, 23,670

According to Hrishikesh Yedve, AVP of Technical and Derivatives Research at Asit C. Mehta Investment Intermediates Ltd., the Nifty 50 has respected the 100-day EMA support near 23,400. He notes that the index is currently facing resistance between 23,800 and 23,810. A decisive move above 23,810 could propel the index toward 24,000 – 24,080.

Bank Nifty Forecast

The Bank Nifty closed down by 11.00 points, or 0.02%, at 51,564.85 on Friday, although it formed a small red candle while reflecting strength on the weekly scale.

• Hrishikesh Yedve advises a "buy on dips" strategy as long as the index remains above the 200-day Simple Moving Average (200-DSMA) support at 51,000. Key resistance levels are identified at 51,850 and 52,000.
• Om Mehra concurs that the broader trend remains bullish, with the Bank Nifty positioned above key moving averages. He anticipates potential consolidation before its next upward movement.

Conclusion

As we look forward, the current market dynamics suggest that both the Nifty 50 and Bank Nifty are at critical junctures. Market participants should keep a close eye on the mentioned support and resistance levels to navigate potential trading opportunities effectively. With the upcoming trading session, it will be essential to adapt strategies based on market movements and technical indicators.