Technical View: Nifty Expected to Consolidate with Support at 24,000, Bank Nifty Charts Indicate Caution

Nifty Trend

On July 2, the Nifty 50 index briefly surpassed the 24,200 mark in the morning but couldn’t maintain that level due to profit-taking, ending the day slightly lower. Experts believe that this consolidation phase may continue as the market shows signs of fatigue after a steady rise. However, as long as the index stays above 24,000, there is potential for it to reach 24,400-24,500 after the consolidation period.

The Nifty 50 started the day strong at 24,229 and reached a new high of 24,236.35. However, it quickly lost those gains and remained volatile for the rest of the session, eventually closing 18 points down at 24,124. This created a bearish candlestick pattern on the daily charts, despite the formation of higher highs and higher lows.

Nagaraj Shetti, a Senior Technical Research Analyst at HDFC Securities, noted that the small negative candle at new highs suggests a lackluster market movement and indicates market fatigue. Despite this, the overall trend for Nifty remains positive. Shetti advised that any further consolidation or minor dips could be seen as buying opportunities due to the bullish pattern of higher highs and higher lows.

He also mentioned that after the consolidation, the market might resume its upward momentum, with immediate support at 23,980 and the next resistance level around 24,400.

In the weekly options market, the 25,000 strike had the highest Call open interest, followed by the 24,500 and 24,200 strikes, with significant Call writing at the 24,200 strike. On the Put side, the highest open interest was at the 24,000 strike, followed by the 23,500 and 23,000 strikes, with notable writing at the 23,400 strike. This data suggests that 24,200 is a key resistance level, with 24,500 being the next target if the index moves higher, and support at 24,000.

Bank Nifty

The Bank Nifty index lost all the gains from the previous day, closing 407 points lower at 52,168. It formed a Bearish Engulfing candlestick pattern on the daily charts, which is a bearish reversal signal. Experts caution that if the index confirms this bearish pattern in the next trading session, traders should be careful.

The index faced selling pressure from higher levels and was rejected at the 52,400-52,500 range. Kunal Shah, a Senior Technical & Derivative Analyst at LKP Securities, stated that the index is in a sell-on-rise mode, with immediate support at the 52,000-51,800 zone. If it fails to hold this support, it could see further selling pressure down to the 51,400-51,300 levels.

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