Nifty 50 Set to Revive Bullish Momentum If Index Sustains Above 24,250

Market Update: Nifty Faces Stiff Resistance, Crucial Support Levels at Play

The Indian market is currently facing stiff resistance in the 24,200-24,250 zone, with a sustained breakout needed above this range to restore bullish momentum. According to Sudeep Shah, head of technical and derivatives research at SBI Securities, a break below 23,650 could open the door to further downside towards 23,300.

Nifty in Correction Mode

The momentum of the pullback rally that began from the recent low of 22,182 has noticeably weakened over the past week. After a sharp recovery from lower levels, Nifty has now entered a phase of correction and consolidation. The index slipped below 23,900 and closed the week down by 1.87 per cent, signaling profit booking following the strong rebound.

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The Nifty IT index dropped 10.31 per cent, which was a key contributor to this decline. The Nifty has fallen below its 20-day and 50-day EMAs, indicating weakening short-term momentum. Although there was a minor recovery in the final hour of the last trading session, indicators remain subdued.

Technical Indicators Suggest Range-Bound Market

The daily RSI failed to cross 60 and has slipped below its 9-day average, pointing to fading bullish strength. Additionally, the MACD histogram has been declining for five consecutive sessions, reinforcing the loss of momentum in the rally. These signals suggest that the index may remain range-bound over the next few sessions rather than trending strongly in either direction.

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FIIs Remain Net Sellers

FIIs remained net sellers for the fifth consecutive session, offloading Rs 8,828 crore in the cash market on April 24. This has taken the cumulative outflows over the past few sessions to Rs 17,140 crore, highlighting a clear bearish undertone in institutional positioning. The single-day selling of Rs 8,828 crore exceeds the combined outflows of Rs 8,312 crore seen over the previous four sessions.

Bank Nifty Expected to Continue Uptrend

Bank Nifty underwent a corrective phase over the past week but continued to outperform the broader indices, as the decline was relatively limited. On the weekly chart, a small-bodied candle with shadows on both ends has formed, indicating indecision and a balance between buyers and sellers.

The 20-day EMA zone of 55,700-55,600 is expected to act as immediate support. On the upside, the 200-day EMA in the 56,600-56,700 range will be a crucial resistance. A sustained breakout above 56,700 could trigger a fresh uptrend, potentially pushing the index towards 57,500 and then 58,200 in the short term.

Buy Recommendations

Sudeep Shah has advised buying two midcaps - PNB Housing Finance and Glenmark Pharma - for next week.

PNB Housing Finance has delivered a strong breakout above its previous swing high of Rs 1,015, signalling a continuation of the bullish trend. Glenmark Pharma has delivered a strong breakout from its Rs 2,275-2,205 consolidation range and followed it up by surpassing the previous swing high of Rs 2,298, signalling a continuation of the uptrend.

Cochin Shipyard and Adani Energy Solutions

Cochin Shipyard has broken out of a downward trendline on the daily chart with strong volume support. RSI is trending higher and DI+ remains above DI-, indicating sustained bullish momentum rather than overbought conditions. Adani Energy Solutions, on the other hand, has rallied sharply, up nearly 56 percent from recent lows. The broader energy sector is outperforming, but with RSI at 83 and ADX at 41, the stock appears overbought.