The Indian stock market is set for a potentially positive opening on Tuesday, as both the Sensex and Nifty 50 indices appear to be influenced by a rebound in Asian markets. Notably, the trends from the GIFT Nifty suggest a favorable start for domestic benchmarks, trading around the 22,650 mark, reflecting a premium of approximately 386 points over the previous Nifty futures close.
Market Recap: A Day of Significant Losses
On Monday, the Indian equity market experienced its most significant decline in ten months. The Nifty 50 fell below the 22,200 threshold, closing at 22,161.60, down by 742.85 points or 3.24%. The Sensex faced a sharper decline, dropping 2,226.79 points, equivalent to 2.95%, landing at 73,137.90.
- Nifty 50: Closed at 22,161.60
- Sensex: Closed at 73,137.90
- Largest single-day drop in 10 months
Insights into Nifty 50 and Bank Nifty
Current Nifty OI Trends
The derivatives market signals a prevailing bearish sentiment, with call writers significantly outpacing put writers.
- 22,500 strike: 45.23 lakh contracts, indicating strong resistance
- 22,000 strike: 80.79 lakh contracts, suggesting solid support
Dhupesh Dhameja, a Derivatives Research Analyst at SAMCO Securities, notes that this trend indicates a weakening defensive stance from buyers, with the 22,300–22,500 range acting as a strong supply zone. The Put-Call Ratio (PCR) has also declined from 0.60 to 0.58, reflecting increased caution in the market.
Nifty 50 Outlook
Following a major sell-off on April 7, the Nifty 50’s daily chart shows signs of potential recovery, with buying interest emerging after a period of significant weakness. Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, points out that Monday’s swing low of 21,743 could act as a crucial support level in the short term.
- Support Level: 21,743
- Immediate Resistance: 22,400
However, the overall trend remains negative. Analysts highlight that the Nifty 50 has slipped below its 20-day, 50-day, and 100-day moving averages, indicating a deteriorating short-term outlook.
Bank Nifty: Analyzing the Recent Plunge
The Bank Nifty index experienced a significant drop of 1,642.60 points, closing at 49,860.10. Despite this decline, the index managed to hold above the 50-Day Exponential Moving Average (50-DEMA), forming a green candle on the daily chart, suggesting some resilience.
- Key Support: 49,500
- Resistance Zone: 50,650 – 50,750
Hrishikesh Yedve from Asit C. Mehta Investment Intermediates emphasizes that a sustained move above 50,750 is necessary to spark a fresh upward rally.
Navigating Market Volatility
Given the current market dynamics, VLA Ambala, Co-Founder of Stock Market Today, highlights that the Nifty 50 index has already corrected nearly 17% from its peak in 2024. Short-term traders are advised to adopt a cautious approach, employing a "sell-on-rise" strategy due to heightened market volatility.
- Support Range for Nifty 50: Between 21,750 and 22,000
- Resistance Levels: Between 22,300 and 22,450
In summary, while there are indications of potential recovery, especially in the Nifty 50, the overall sentiment remains cautious. Investors should stay alert and be prepared for continued fluctuations in the market.
