Technical Stock Review: The Nifty 50 closed somewhat lower on April 30 after losing 178 points from the day’s peak as a result of profit-taking, failing to hold on to new record high levels. Although there has been profit booking, overall the trend is still positive because the index has traded above all significant moving averages and has continued to form higher highs and lower lows. However, experts believe that in the near future the index will likely consolidate, finding immediate support at levels between 22,500 and 22,400 as well as critical support at 22,300, before rising above the all-time high.
Technical Stock Review: Day Movement
The Nifty 50 began the day higher at 22,680 and continued to rise, setting a new record high of 22,783.35. However, the final hour of trading was lackluster as profit-taking caused the index to settle 39 points lower at 22,605, creating a bearish candlestick pattern on the daily charts.
From a technical perspective, this pattern indicates the existence of significant overhead resistance in the market near 22,800 levels. “Nifty is presently positioned to form a new higher top of the pattern, and the bigger degree of higher tops and bottoms remains intact. To label this as a top reversal pattern, there must be some justifiable weakness from here, according to senior technical research analyst Nagaraj Shetti of HDFC Securities.
He believes that a sustained advance above the 22,850–22,900 levels would be necessary for any more significant upmove. “After taking into account the obstacles, it is possible that there will be a brief, slight decline from the highs. 22,400 is for immediate support, according to Nagaraj.
Bank Nifty
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In addition, the Bank Nifty saw increased trading and approached the 50,000 barrier, reaching a new record high of 49,975. However, profit booking caused the index to settle 27 points down at 49,397. On the daily charts, the index created a small-bodied bearish candlestick with a long upper shadow, suggesting selling pressure at higher levels.
“Even if the index failed to cross the 50,000 threshold, the mood is still positive overall. According to Kunal Shah, senior technical & derivative analyst at LKP Securities, “dips in the index should be viewed as buying opportunities, especially with strong support noted around the 49,000 mark, where the highest open interest lies on the Put side.”
It appears that the bulls were uneasy due to the increasing volatility, as the fear gauge, the India VIX, increased 5.19 percent to 12.87 from 12.24 levels, marking the fifth day of growth. The VIX increased by 26% in a span of five days.
Also Read: Nifty remains shy of record high today