Nifty 50, Bank Nifty Correction to Extend for Third Day Amid Oil Price Rise

Market Outlook: Nifty 50 and Bank Nifty Face Consolidation Amid Oil Price Volatility

The Indian stock market is expected to see further consolidation in the upcoming sessions as soaring oil prices amid tensions over the Strait of Hormuz signal caution. The Nifty 50 is likely to persist with a cautious bias until it reclaims and sustains above 24,600. If the index breaks below 24,100, a fall towards 24,000-23,900 is possible.

Market Performance: Nifty 50 and Bank Nifty

On April 23, the Nifty 50 declined 205 points (0.84 percent) to 24,173, while the Bank Nifty plummeted 819 points (1.43 percent) to 56,305. Market breadth was negative, with 1,934 shares declining compared to 1,031 advancing shares on the National Stock Exchange.

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Nifty 50 Outlook and Strategy

Dhupesh Dhameja, Derivative Research Analyst at Samco Securities, said the Nifty extended its decline for a second session, reflecting weakness at higher levels after failing to sustain above the 0.50 Fibonacci zone (24,260-24,300). The index continues to hover around this key support, indicating softening momentum within a broader consolidation phase.

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Strategy: Traders may consider a Bear Call Spread for the April 28 expiry by selling one lot of the 23,850 CE at Rs 388 and buying one lot of the 24,200 CE at Rs 165.

Nifty 50 Technical Analysis

Jay Mehta, Technical Research at JM Financial Services, said Nifty formed a shooting star followed by a bearish harami pattern near the 24,500 resistance zone. Although the price closed above this resistance on Tuesday, no follow-up buying was seen on Wednesday. The index is currently trading below its 50- and 200-day EMAs but remains above the 20-day EMA.

Strategy: Prefer range trading between 23,800 and 24,800. For short-term momentum, await a breakout on either side of the 24,000-24,600 range for a potential 200-300-point move on either side of the breakout.

Bank Nifty Outlook and Positioning

Dhupesh Dhameja, Derivative Research Analyst at Samco Securities, said Nifty Bank witnessed profit booking at higher levels after a sharp recovery, facing rejection around the 0.618 Fibonacci zone (57,200), indicating supply on rallies. However, the index continues to hold above the 0.50 retracement level (55,800), keeping the broader structure intact.

Strategy: Traders may consider a Short Straddle for the April 28 expiry by selling one lot of the 57,000 CE at Rs 237 and one lot of the 55,800 PE at Rs 306.

Bank Nifty Technical Analysis

Jay Mehta, Technical Research at JM Financial Services, said Bank Nifty formed a bearish harami cross during Wednesday's session. Despite sustaining above the 200-day EMA on Tuesday, a lack of follow-up buying dragged the price back below this key average.

Strategy: Prefer range trading between 54,550 and 57,800. Long positions should be maintained only as long as 54,550 holds. A sustained move above 57,800 is required to resume the bullish trend.