Nifty 50 Bears Reassert Themselves Amid Rising Oil Prices, 23,550 in Focus for Next Week

Nifty 50 Falls for Third Consecutive Session Amid Geopolitical Tensions and Weakening Rupee

The Nifty 50 continued to witness profit booking for the third consecutive session on April 24, falling more than 1 percent as heightened geopolitical tensions in West Asia, a rally in crude oil prices, a weakening rupee, and a downgrade of India by global rating agencies weighed on sentiment.

Key Metrics

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The index broke below short-term moving averages and is now trading below key moving averages, with weakening momentum indicators signaling that bears are gaining control of the market. Further, the index has filled the bullish gap of April 15 and has undergone a 23.6 percent Fibonacci retracement of the recent sharp rally, indicating a weakening trend.

Hence, if selling pressure extends in the upcoming sessions, 23,700 (near the 38.2 percent Fibonacci level) is the level to watch, followed by 23,555 (also the low of the previous week) and 23,400 as key support levels. However, the 24,000–24,200 zone is expected to be an immediate crucial resistance area, as only sustained movement above it can increase the chances of a move toward 24,600, according to experts.

The Nifty 50 opened lower at around 24,100 and extended its downtrend as the day progressed, hitting an intraday low of 23,814. The index showed some recovery in the last hour of trade and closed at 23,898, down 275 points (1.14 percent).

On the daily charts, the index has formed a bearish candle with upper and lower shadows and continued a lower highs formation for the third consecutive session, signaling that sellers are firmly in control. Momentum indicators are showing signs of fatigue, with the RSI witnessing a sharp drop from the 60 zone to 49.21, along with a bearish crossover, suggesting a pause in bullish momentum. Additionally, the DI- has crossed above DI+ on the ADX indicator, indicating that sellers are beginning to assert dominance.

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The Nifty 50 shed 1.87 percent for the week and formed a bearish candle with a small upper shadow on the weekly timeframe, indicating profit booking. However, the higher high–higher low formation continued for the third consecutive week. Monthly options data also indicates that the 24,000–24,200 zone is expected to be a crucial resistance area in the immediate term, as both levels have maximum Call open interest, while 23,500, which has the maximum Put open interest, is likely to be key support.

Meanwhile, the volatility index, India VIX, soared 6.04 percent to 19.71 and surged 14.57 percent for the week, which remains a concern. A cooldown in volatility would be a positive sign for the bulls; however, moving above and sustaining above 20 could put bulls at risk.

Bank Nifty Also Felt the Heat

The banking index was also under pressure but outperformed the benchmark Nifty 50, falling 215 points (0.38 percent) to 56,090 and forming a small-bodied bearish candle with upper and lower shadows on the daily charts, indicating pressure at higher levels as well as buying interest at lower levels. The 55,600 (20-day EMA) is key on the downside; a decisive break below it could strengthen bearish sentiment.

The index has now fallen below medium- and long-term moving averages but still defended short-term moving averages as well as the 23.6 percent Fibonacci retracement of the recent rally. The RSI dropped to 52.27 with a negative crossover, while the MACD flattened, though it held above the zero and signal lines; however, the histogram's green bars continued to shrink. All this indicates weakening bullish momentum, as bears gradually gain traction.

The banking index has corrected nearly 2.5 percent from its recent high of 57,456 recorded on April 21 and shed 0.84 percent during the week, but it continued its higher high–higher low structure. It formed a bearish candle with a long upper shadow and a minor lower shadow on the weekly charts, indicating pressure at higher levels despite some buying interest at lower levels.

According to Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities, "Going ahead, the immediate support for Bank Nifty is placed in the 55,500–55,400 zone. Any sustained move below this zone could result in Bank Nifty extending its weakness toward 55,000, followed by 54,500 in the short term."