The Nifty 50 closed nearly unchanged on July 16, marking the fifth straight session where it defended the 20-day exponential moving average near 24,040. The index struggled to break above the 24,260-24,300 zone, which aligns with the 61.8% Fibonacci retracement of the recent fall from 24,530 to 23,800. On the downside, the psychological mark of 24,000 provided support for the fifth consecutive session.
Experts say the near-term range remains between 24,300 on the upper side and 24,000 on the lower side. A clear move beyond this band could give direction to the market. Below 24,000, crucial support is seen at 23,800, while above 24,300, the next resistance is at 24,400-24,500.
Market participants are watching developments in West Asia and crude oil prices. Oil remained range-bound near its 50-day and 100-day moving averages, after hitting a recent high of $87.51 per barrel. Prices stayed above short-term averages, which continue to trend higher.
The Nifty 50 opened at 24,142 and rose to an intraday high of 24,186 before losing steam in the afternoon. It slipped below 24,100 in the last two hours amid volatility and ended 6 points lower at 24,073.
On daily charts, the index formed a bearish candle with small shadows on both sides, indicating weakness within the range. The broader trading range has been 23,800 to 24,300 since July 8, when the index corrected over 2%.
Momentum indicators were sideways to weak. The Relative Strength Index (RSI) was at 52.15, above 50 but below its signal line. The Moving Average Convergence Divergence (MACD) continued to fall below the signal line, with the red histogram expanding for the third straight session, signaling weakening momentum.
“Technically, the index is likely to find strong support in the 23,950-24,000 zone. The 24,250-24,300 region will act as immediate resistance, with a broader hurdle near 24,500,” said Vatsal Bhuva, Technical Analyst at LKP Securities.
Weekly options data showed the highest Put open interest at the 24,000 strike, reinforcing support. The highest Call open interest was at 24,200 and 24,100 strikes, marking immediate resistance. A buy-on-dips near support and sell-on-rise near resistance strategy remains suitable, Vatsal advised.
The India VIX fell 2.92% to 12.88, extending its downtrend for the second session, supporting bullish sentiment. A VIX drop below 12 could further comfort bulls.
The Bank Nifty reversed part of the previous session’s gains, ending 176 points (0.30%) lower at 57,582. It defended its 20-day EMA for the sixth straight session, especially after the sharp 2.5% correction on July 8.
The Bank Nifty continued to trade above all key moving averages, indicating a healthy broader structure. It also stayed above the 23.6% Fibonacci retracement of the rally from May low to June high at 57,300 for the fifth session.
Momentum indicators remained sideways to weak. RSI was 53.44, above 50 but below the signal line. The MACD continued lower below the reference line, with the red histogram in place for the eighth consecutive session, indicating weakening momentum.
The index formed a small bearish candle with minor shadows, showing indecision during consolidation.
According to Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, the 58,100-58,200 zone is a crucial resistance. A decisive move above 58,200 could trigger a rally towards 58,700 and then 59,300. On the downside, 57,100-57,000 is key support. A sustained fall below 57,000 may accelerate selling towards 56,500.