Trade Setup For May 5: Nifty Support Moves To 23,950 Amid Fears Of US, Iran Returning To War

The NSE Nifty 50 finds immediate support at 23,980-23,950 levels, despite ending sharply higher on Monday, according to Sudeep Shah, head of technical and derivatives research at SBI Securities.

Global cues turned negative later in the day, as tensions escalated in the Middle East following Iranian drone "strikes" at the United Arab Emirates' Fujairah oil facility.

Iran also said that it has attacked two US warships trying to enter Hormuz, even as Washington has denied the claim. Brent crude oil futures had rallied 5% after the news regarding Iran's alleged attack on US warships broke.

Domestic cues also turned negative, with GIFT Nifty trading at a downturn of 0.12% at 24,017. This indicated a possible negative start for the Dalal Street on Tuesday.

ALSO READ: Oil Prices Jump 5% On Reports Of Iranian Missiles Hitting US Warship In Hormuz

On the flip side, if the market continues its upward momentum, then Nifty would face resistance at 24,450, followed by 24,600 in the short term, he added.

The index formed a small bullish candle with a long upper shadow highlighting intraday volatility as the index consolidates with positive bias around the 20 days extended-moving average, according to Bajaj Broking's market research.

Short-term support is positioned around 23,600–23,500 range according to the brokerage.

Bank Nifty 

The Bank Nifty finds immediate support in the 54,400-54,300 zone according to Shah.

"Any sustainable move below this zone could result in Bank Nifty extending its weakness towards 53,900, followed by 53,500 in the short term. On the upside, the zone of 55,300–55,400 zone is likely to act as an immediate resistance," Shah said.

Bajaj Broking expects the index to extend consolidation in the broad range of 54,000-57,500 amid stock specific action during the quarterly earning session of the banking stocks.

"A breach below the key support area of 54,000 will signal extension of the decline towards 52,500 levels being the gap area of the 8^th April," the brokerage said.

Market Recap

Indian equity benchmarks ended higher on Monday, with Nifty closing 0.5% up at 24,119.30, while the Sensex ended 356 points higher at 77,269.40. Intraday, the 30-stock index had risen as much as 1.3% or 997.25 points to 77,910.75 and the 50-share index had gained as much as 1.2%.

ALSO READ: Stock Market Highlights Today: Nifty, Sensex Start Week Higher As Global Markets Support Gains

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