Nifty 50: Here's how experts interpret the recent stock market volatility

Trading strategies in Nifty and Bank Nifty by market experts: Consensus view is that Nifty may hold the bullish bias as long as the index holds above 24,000-mark; check key levels here.

The NSE Nifty 50 index has experienced higher volatility in the recent trading sessions owing to the key events in the US. The NSE benchmark index ended around 1 per cent higher or lower in each of the last four trading sessions; thus swaying investor’s mood from bearish to bullish and vice versa.

 

Over the course of the last six weeks, the Nifty 50 index has plunged over 9 per cent or over 2,400 points from its peak of 26,277, hit on September 27, 2024. However, the recent sharp swings in Nifty are of the highest margin in terms of per centage during the entire period.

 

India VIX, the primary indicator of market volatility, was edged 0.5 per cent higher to close at 14.94 on Thursday. 

 

With VIX levels remaining below 15, the potential for sustained bullish momentum is higher, as lower volatility typically supports buying interest, explains Dhupesh Dhameja, Technical Analyst at SAMCO Securities.

 

Meanwhile, here’s how market experts across brokerage houses interpret the recent market volatility, and the likely road ahead for the Nifty 50 index and the Bank Nifty:

 

Jatin Gedia - Technical Research Analyst at Sharekhan by BNP Paribas

 

On the daily charts we can observe that the Nifty has faced selling pressure from the upper end of the falling channel. The daily momentum indicator has a positive crossover which is a 'Buy' signal and the Nifty is trading around the key hourly moving averages i.e. around support which makes it a Buy setup.

 

We shall hold on to our bullish outlook for the Nifty for targets of 25,350 from short term perspective. On the downside 24,000 shall act as a crucial support level.

 

Whereas, the Bank Nifty faced rejection around the 52,500 mark and has witnessed some profit booking. However, it has held on to its crucial support zone of 51,750 – 51,650 and we expect the undertone to remain sideways to bullish from short term perspective. 

 

Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates (A Pantomath Group Company)

 

Technically, on a daily basis, the Nifty formed a red candle, suggesting weakness. Thus, 24,500 will serve as the initial hurdle for the Nifty, followed by 24,700. However, the index continues to respect 150-dDay exponential moving average (DEMA) support near 23,990, as well as recent swing support near 23,800.

 

In the immediate term, we expect the Nifty will consolidate in the range of 23,800 to 24,700. A decisive breakout on either side will determine the next direction of the Nifty.

 

The Bank Nifty is consolidating in the band of 50,400 - 52,580 since the last one week. The index has formed higher lows but was unable to cross the barrier of 52,580. On the downside, index is respecting 150-day exponential moving average (DEMA) which is placed near 50,540 levels. If the index sustains above 52,580, then only fresh up move could be possible, otherwise, the index will continue its consolidation.

 

Aditya Agarwal, Head of Derivatives & Technical Analysis at Sanctum Wealth

 

From a short-term perspective, the Nifty is expected to consolidate between 24,000 - 24,500 levels with no clear direction. Dips towards 24,120 - 24,040 can be used to initiate fresh longs, whereas move towards 24,450 - 24,500 can be used to book profits in trading longs.

 

The Bank Nifty found support around 51,750 - 51,800 levels on Thursday and saw a minor pullback. Overall structure for the Bank Nifty is positive and dips towards 51,700 - 51,500 can be used as buying opportunity for targets of 52,350 - 52,600.