Following the market crash on Friday, when Nifty 50 declined over 300 points and Sensex slumped 1,000 points, the key support levels for the former has slipped into the 23,400-23,350 range, according to Sudeep Shah, head of technical and derivatives research at SBI Securities.
GIFT Nifty futures signalled a negative start for Monday, as they were trading 0.15% lower at 23,687.
Global cues were mixed, as the US stock market and global oil market reacted positively to the reports hinting at the US and Iran closing in on a peace deal. However, on Sunday, when the markets were closed, Iran's chief negotiator Mohammad Bagher Ghalibaf clarified Tehran would not accept any deal "without any tangible results".
ALSO READ: Oil Sinks To Six-Week Low As Traders Bet On Possible US-Iran Truce
For the Dalal Street, analysts have warned that any sustainable move below the support zone of 23,350 could result in Nifty extending its weakness towards 23,200. This could be followed by a slump to 23,050 in the short term.
"On the upside, the immediate resistance for Nifty is placed in the 23,750-23,800 zone," Shah said.
According to Dhupesh Dhameja, derivatives research analyst at SAMCO Securities, unless the Nifty reclaims the 23,800–24,000 zone on a closing basis, the broader bias is likely to remain cautious.
"The current setup favors a sell-on-rise approach, while stock-specific opportunities are expected to outperform until a decisive breakout on either side establishes the next directional trend," Dhameja said.
Bank Nifty
The Bank Nifty finds immediate support at 53,800-53,700 levels, according to Shah. "Any sustainable move below this zone could result in Bank Nifty extending its weakness towards 53,300, followed by 52,900 in the short term," he stated.
On the upside, the immediate resistance for Bank Nifty is placed in the 54,600-54,700 zone, as per the analyst.
"Overall, Nifty Bank remains trapped between strong overhead supply and a well-defended support zone," Dhameja said. Unless the index decisively reclaims the 54,500–55,000 region, the broader setup is likely to remain corrective with a stock-specific trading approach, Shah noted.
"A breakout from the current range is expected to determine the next meaningful directional move for the index," Dhameja added.
Market Recap
The Sensex declined 2.8% in May, marking its worst May performance in six years. The index had fallen 3.8% in May 2020.
The Nifty 50 fell 1.9% in May, logging its worst performance for the month in four years. The index had declined 3% in May 2022.
Intraday, the Nifty fell as much as 1.8% on Friday to 23,484.75 after rising as much as 0.4% to 24,002 earlier. The Sensex declined as much as 1,278 points, or 1.7%, to 74,589.11 after gaining as much as 0.5% to 76,220 earlier.
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