Technical View: Nifty trading in narrow range

Analysts said the Nifty continues to trade within a narrow band and a decisive move beyond the 24,700–24,800 zone is likely to set the tone for the next directional move.

Sensex, Nifty closed lower in a range-bound trade on Friday.

The equity benchmarks ended lower on Friday in a range-bound trade, weighed down by losses in IT stocks and cautious sentiment across Asian markets following renewed trade uncertainty triggered by a US court’s move to temporarily reinstate reciprocal tariffs.

Additionally, India’s economic growth slowed to 7.4 percent in the March quarter, bringing down the annual growth rate to 6.5 percent during 2024-25, according to official data released on Friday. The growth in the January-March period was lower than the 8.4 per cent expansion in the year-ago quarter.

The Sensex fell 182.02 points or 0.22 percent to close at 81,451.01. During the session, it dropped as much as 346.57 points to touch a low of 81,286.45. The broader Nifty slipped 82.90 points or 0.33 percent to end at 24,750.70.

Analysts said the Nifty continues to trade within a narrow band and a decisive move beyond the 24,700–24,800 zone is likely to set the tone for the next directional move.

“Nifty has remained volatile with a negative bias on the first day of the June series,” said Rupak De, Senior Technical Analyst at LKP Securities. “On the hourly chart, the index has formed a bearish moving average crossover while the RSI points to short-term weakness. There are also signs of exhaustion on the daily RSI, with a clear negative divergence.”

He added that 24,700 is acting as immediate support and a fall below this level could push the index down to 24,500. On the upside, 24,800 remains a stiff resistance, where heavy call writing activity has been observed.

Ajit Mishra, SVP – Research at Religare Broking, advised a “buy-on-dips” approach as long as the Nifty holds above its 20-day exponential moving average (DEMA), which is currently near the 24,600 mark. “A breakdown below this support zone may invite more selling pressure and prolong the current phase of consolidation,” he said.

According to Bajaj Broking, the weekly chart of the Nifty shows the formation of a small bearish candle that remained largely within last week’s range, reflecting ongoing consolidation. The index is likely to continue trading sideways between 24,400 and 25,080 in the near term.

“The past two weekly highs are clustered between 25,050 and 25,080, and a breakout above this band could trigger a fresh rally toward 25,300,” the brokerage said. However, failure to cross the upper end of this range may indicate a further extension of the ongoing consolidation. Key support in the near term lies between 24,400 and 24,500, which also coincides with the 61.8 percent retracement level of the recent uptrend from 23,935 to 25,116.

In the banking space, Bajaj Broking noted the Bank Nifty is currently testing the upper boundary of a five-week range near 55,800–56,000. A sustained move above 56,000 may pave the way for a rally towards 56,700. On the downside, immediate support is placed at 54,800, while stronger support lies between 54,000 and 53,500 — an area marked by key retracement levels and the 50-day EMA.

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