The benchmark Nifty 50 fell for the fifth consecutive session on May 30, the monthly F&O expiry day, losing nearly a percent. However, it managed to hold the 20-day SMA as well as the 50 percent Fibonacci retracement level (from 21,821 to 23,111) at close. Generally, these levels play a crucial role in support. If the index rebounds from here, the 22,700-22,800 range may act as a hurdle on the higher side, followed by the 23,000 mark, according to experts.

If the bears remain in a strong position, then 22,400 is the immediate support, followed by 22,300 levels, which coincides with the 61.8 percent Fibonacci retracement level. The volatility remained high, at above 24 levels, ahead of exit polls on June 1 and Lok Sabha election results on June 4.

The Nifty 50 ended at 22,489, down 216 points or 0.95 percent, the biggest single-day fall since May 9. It formed a bearish candlestick pattern with upper and lower shadows on the daily charts. The index continued forming lower highs and lower lows for three consecutive days.

Meanwhile, the Bank Nifty bounced back after a couple of days of correction, rising 181 points or 0.37 percent to 48,682, and formed a bullish candlestick pattern with an upper shadow on the daily timeframe. The 49,000 level is likely to be the key resistance for the index, while 48,300 is expected to be the support zone.

Deven Mehata, Equity Research Analyst at Choice Broking

On the lower side, the Nifty has strong support near the 22,385 level, which is also close to its 50-day EMA levels. If the index fails to hold this support, a further correction towards the next support at 22,150 levels can be expected. On the higher side, the Nifty has strong resistance near the 22,600 level, which is also close to its 20-day EMA levels. If the Nifty closes above 22,600, it may move towards 22,850 levels.

Key Resistance: 22,600, 22,850

Key Support: 22,385, 22,200

Strategy: Buy on dips near 22,385 levels with a target of 22,600 and 22,850 levels

Stop-Loss: 22,200 on a closing basis

Chandan Taparia, Head - Equity Derivatives & Technicals, Broking & Distribution at Motilal Oswal Financial Services

Now, until it holds below 22,500 zones, weakness could extend towards 22,350 and then 22,222 zones, whereas hurdles can be seen at 22,600 and then 22,750 zones.

Since it is the beginning of a new series, options data is scattered at various strike prices. On the weekly front, the maximum Call open interest (OI) is at 23,000, followed by the 22,800 strike, while the maximum Put OI is at 22,000, followed by the 22,500 strike. Minor Call writing was seen at 22,500 and 22,600 strikes, while minor Put writing was seen at 22,400 and 22,200 strikes. Option data suggests a broader trading range between 21,800 to 23,100 zones, with an immediate range between 22,100 to 22,800 levels.

Key Resistance: 22,750, 23,000

Key Support: 22,222, 22,000

Strategy: For Nifty hedging, apply monthly Bear Put Spread strategy - Buy 1 lot of 22,500 strike Put at Rs 470 & Sell 1 lot of 21,000 strike Put at Rs 120 of June 27 expiry. The Margin Required is approximately Rs 20,000 per lot, and the lot size is 25.

Net Premium Paid: 350 points

Maximum Risk: 350 points (Rs 8,750) if Nifty moves higher

Maximum Reward: 1,150 Points (Rs 28,750) if Nifty goes below 21,000 zone

Risk: Reward is 1: 3.28

Virat Jagad, Technical Research Analyst at Bonanza Portfolio

The market closed below 22,500, which was acting as support for the index. The next support is at 22,350, followed by 22,000. To regain strength on the upside, Nifty needs to trade above 22,750 levels.

Nifty closed below its 21-day EMA, indicating a short-term change in trend. The Relative Strength Index (RSI) is moving southward, supporting the price action, which means a short-term downtrend.

Key Resistance: 22,535, 22,750

Key Support: 22,350, 22,000

Strategy: Sell 1 lot of 22,750 strike Call & Buy 1 lot of 22,850 strike Call

Shrikant Chouhan, Head Equity Research, Kotak Securities

After a sharp correction, the market is currently trading near the 20-day SMA. We believe that the market has completed one leg of correction, and for traders, the 20-day SMA or 22,450 would act as the trend-deciding level. Above this, the index could bounce back to 22,600-22,750. On the flip side, a fresh selloff is possible only after breaking below 22,450, after which the market could slip to 22,350 and 22,325.

Key Resistance: 22,600, 22,750

Key Support: 22,350, 22,325

Strategy: Short-term traders should remain cautious and be very selective as there is a risk of getting trapped at lower levels

Bank Nifty Outlook and Positioning

Deven Mehata, Equity Research Analyst at Choice Broking

The Bank Nifty managed to close above 48,500 levels, signaling strength. On the higher side, the index faces minor resistance in the 49,000-49,200 level range.

Once the index closes above this resistance range, it can reach the target of 50,000, marking fresh all-time high levels.

Thursday’s closing above 48,500, coupled with the strong bullish candle, underscores the bullish sentiment in Bank Nifty. If the index surpasses 49,000, it could attract additional buying interest, propelling it towards a milestone of 50,000.

Key Resistance: 49,000, 49,200

Key Support: 48,300, 48,200

Strategy: Buy on dips near 48,300 levels for a target of 49,000 and 49,200 levels

Stop-Loss: 48,200 on a closing basis

Chandan Taparia, Head - Equity Derivatives & Technicals, Broking & Distribution at Motilal Oswal Financial Services

On a daily scale, Bank Nifty has been consolidating in a wider range between 48,250 to 49,500 zones but is holding well above its 50 DEMA with some stock-specific action. A decisive hold above 49,250-49,500 zones could commence the next leg of the rally towards 51,000-51,500 zones.

Bank Nifty volatility has increased sharply by almost 133 percent in the last month from 15 to 34 levels. Post the election outcome, we expect volatility to cool off from higher zones. We can initiate an Iron Butterfly Option Strategy to benefit from time decay and the cool-off in volatility.

It formed a bullish candle on the daily scale and negated the formation of lower highs after three sessions. Now, it has to continue holding above 48,500 zones for a bounce towards 49,250 and then 49,500 zones. A hold above this level could see some weakness towards 48,250 and then 48,000 levels.

Key Resistance: 49,250, 49,750

Key Support: 47,777, 48,000

Strategy: Apply Bank Nifty monthly Iron Butterfly Strategy with a June 26 expiry. Sell 48,500 strike Call, Sell 48,500 strike Put, Buy 51000 CE, and Buy 46000 PE of June 26 expiry (monthly)

Sell 1 lot of 48,500 strike Call at Rs 1,550, Sell 1 lot of 48,500 strike Put at Rs 1,050. Buy 1 lot of 51,000 strike Call at Rs 500, Buy 1 lot of 46,000 strike Put at Rs 350

Margin Required: Rs 50,000

Net Premium Received: 1,750 points (Rs 26,250)

Maximum Risk: 750 points (Rs 11,250)

Lot size: 15

Profit if it remains in between 46,750 to 50,250 zones

Shrikant Chouhan, Head of Equity Research at Kotak Securities

Despite weak market sentiment, the Bank Nifty index holds a higher bottom formation on daily charts, which is largely positive. For trend-following traders, the 20-day SMA or 48,300 would be a holy support level. If it trades above this level, it could move up to 49,500-49,800. However, below 48,300 or the 20-day SMA, traders may prefer to exit from long trading positions.

Key Resistance: 49,500, 49,800

Key Support: 48,300

Strategy: Below 48,300, traders may prefer to exit from the trading long positions