The Bank Nifty index sustained its upward trajectory in April, marking its third consecutive month of gains and achieving a new all-time high on Tuesday. The index surged by 4.8% last month, surpassing the benchmark Nifty 50, which posted a more modest 1.24% increase during the same period.
On April 30, Bank Nifty soared to a fresh peak of 49,974.75. However, profit booking in the latter part of the trading session led to a decline of over 500 points from its high, causing it to end slightly lower. The index saw a volatile trading session, with bullish sentiment dominating the first half and bears prevailing in the latter half.
Market participants are now closely monitoring the psychological milestone of 50,000 on the Bank Nifty index. Analysts suggest that breaching this level might not be easy, anticipating the level to act as a resistance point in the near term.
Also Read: April Market Review: Nifty 50 soars for 3rd straight month, gains 1.2%; metal index top performer
Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd. believes the 50,000 level is an immediate psychological hurdle, while 50,500 is the next hurdle for Bank Nifty.
According to him, 49,000 and 48,700 will act as immediate support levels for Bank Nifty on the downside.
The Bank Nifty index formed an inverted hammer candlestick pattern formed on the daily chart, indicating profit booking from higher levels.
The Bank Nifty call data shows, the highest open interest is observed at 50,000, acting as a resistance level, while on the put side, 49,000 is seen as a good support level.
Mandar Bhojane, Research Analyst at Choice Broking is of the view that if the Bank Nifty surpasses the 49,600 level, it could potentially ascend to the 50,000 mark and even 50,500 at all-time highs in the days ahead, with 49,000 serving as immediate support.
Sagar Doshi, Senior Vice President- Research, Nuvama Professional Clients Group believes that Tuesday’s price action suggests that the underperformance of Bank Nifty over the Nifty 50 is likely to continue for the next couple of trading sessions which is likely to drag the index lower towards 48,600 odd.
Also Read: Share market in April: M&M, Axis Bank among top 5 gainers as Nifty gains 1%; HCL Tech, Kotak Bank among top 5 losers
“Erosion of futures premium in the start of fresh derivative series is also suggesting some cool off on long positions for the index. Bank Nifty has also completed its Fibonacci Extension targets of 49,800 and faced rejection from the same. All of these point towards an underperformance for the coming week on the index,” Doshi said.
Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities believes although the index fell short of reaching the 50,000 mark, the overall sentiment remains bullish.
“Dips in the index should be seen as buying opportunities, especially with strong support noted around the 49,000 mark, where the highest open interest lies on the put side,” Shah said.
Meanwhile, the Nifty 50 also touched a record high of 22,783.35 on April 30, led by several key drivers behind the Indian market’s momentum. Strong corporate earnings, sustained economic growth, strong domestic cash flow, stable crude oil price and optimistic outlooks across various sectors which have propelled stock prices upward, reflecting confidence in India’s economic trajectory, analysts said.
Also Read: Nifty IT index falls 5% in April; how to play the IT sector after Q4 results?
“Looking ahead, while the current record highs signal optimism, potential challenges such as inflationary pressures, geopolitical uncertainties, and policy developments should be monitored closely. The trajectory of the Indian market will depend on the interplay of these factors, with continued economic resilience and prudent risk management likely to sustain momentum in the near term,” said Gour.
Technically, Nifty closed above 20-DMA (Day Moving Average) but saw some profit booking at their all time high level and closed at 22,600 levels. It is likely to head towards the 23,000 mark, where 22,685 - 22,775 will be an immediate resistance zone. 22,550 is immediate support, while 20-DMA is placed at 22,430, he said.
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