Nifty Breakout Above 24,500 Crucial for Sharp Rally, Consolidation Expected Until Then; Bank Nifty Faces Critical Hurdle at 57,100

Market Participants Remain Cautious Amid Ongoing Disputes Over Strait of Hormuz Reopening

The Nifty 50 saw a flat close with a positive bias on April 20, as market participants remained cautious following renewed disputes over the reopening of the Strait of Hormuz. Investors are eagerly awaiting further developments regarding a potential US-Iran deal, especially with the ceasefire set to expire this week. The near-term trend remains in favor of bulls, though flat momentum indicators signal a consolidation phase with a lack of strong directional conviction.

Going ahead, 24,500 is expected to be a key resistance zone for the Nifty 50, as only a decisive move above it can open the door to the 24,700–24,800 levels. Until then, consolidation may continue, with immediate crucial support placed at 24,100–24,000, experts said.

The Nifty 50 attempted a higher high formation by hitting an intraday high of 24,481 but witnessed mild profit booking at those levels, which restricted the index from surpassing the 24,500 zone. Eventually, the index ended the session at 24,365, up 11.3 points on Monday.

Nifty 50 Price Action Highlights Consolidation

The index formed a small-bodied bearish candle with both upper and lower shadows on the daily timeframe, signaling consolidation. Today's price action also highlighted the presence of a crucial hurdle at the upper range of the large bearish gap formed on March 9, while the higher high–higher low formation remained intact.

The index sustained well above not only the 50-day EMA but also the short-term moving averages, with both the 10- and 20-day EMAs trending upward. The RSI remained around the 57 zone, while the MACD moved above the zero line with a positive crossover for the first time since February 23, though the green histogram bars faded slightly. All this indicates a mildly positive but cautious undertone.

Buy-on-Dips Opportunity Around Higher Lows

Hence, any consolidation or dip could present a buy-on-dips opportunity around higher lows in the near term, said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities. According to him, immediate support is placed at the 24,100 level, while the key overhead resistance to watch is at 24,500.

Weekly Options Data Suggests 24,500 as Immediate Resistance

The weekly options data also suggested 24,500 as the immediate resistance for the Nifty 50, with 24,000 acting as crucial support. The maximum Call open interest was observed at the 25,000 strike, followed by the 24,500 and 24,800 strikes, with the highest Call writing at the 24,400, 24,450, and 24,900 strikes.

The 24,000 strike holds the maximum Put open interest, followed by the 23,800 and 24,300 strikes, with the highest Put writing at the 23,700, 24,400, and 24,100 strikes.

India VIX Rebounds Sharply

Meanwhile, the India VIX, which measures expected market volatility, rebounded sharply by 9.21 percent to 18.79, signaling some discomfort for bulls. It is necessary for the VIX to fall and sustain below the 15 level to provide comfort to bulls.

Bank Nifty Faces Resistance Near Previous Swing High Zone

The banking index faced strong resistance near its previous swing high zone around the 57,100 level and could not sustain there due to mild profit booking, slipping from higher levels. Despite moderate pressure, Bank Nifty closed the session at 56,582, up 17 points.

Bank Nifty Price Action Indicates Selling Pressure

On the daily chart, the index formed a bearish candle with a long upper shadow and a relatively small lower shadow, indicating selling pressure at higher levels and hesitation among bulls to carry the momentum forward. The index could not sustain above the 100- and 200-day EMAs on a closing basis, but it still held above the 10-, 20-, and 50-day EMAs. The short-term moving averages continued to trend upward, signaling a near-term bullish bias.

Momentum Indicators Suggest Consolidation

Furthermore, momentum indicators have remained largely flat over the last 2–3 trading sessions, suggesting consolidation and a lack of clear directional strength in the near term.

Key Support and Resistance Levels for Bank Nifty

According to Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, the 56,100–56,000 zone is expected to act as an important support area for the index. On the upside, the 57,000–57,100 zone will continue to serve as a crucial hurdle. A sustained and convincing breakout above 57,100, supported by volume expansion, could trigger further upside momentum, with Bank Nifty potentially advancing towards 57,600, followed by 58,200 in the short term, he said.

Comparison of Nifty 50 and Bank Nifty Performance

| Index | Previous Close | Current Close | Change | | --- | --- | --- | --- | | Nifty 50 | 24,354 | 24,365 | +11.3 | | Bank Nifty | 56,565 | 56,582 | +17 |

Note: The above comparison is based on the provided data and may not reflect the actual performance of the indices.