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The index opened on a strong note, surging nearly 300 points (1.16%) to touch an intraday high of 24,589. But the rally was short-lived and the index reversed sharply, declining 350 points from its peak to 24,240 around 12:30 pm.
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It then traded within the narrow range of 24,240–24,400, with technical resistance near the 24,400 mark capping further upside. This price action suggests the possibility of near-term consolidation.
Two stock recommendations by MarketSmith India
Buy: Eris Lifesciences Ltd. (current price: ₹1,493.5)
Why it’s recommended: Strong financial performance, growth prospects, market position, and operational efficiency
Key metrics: P/E: 55.34, 52-week high: ₹1,593.90, volume: ₹69.62 crore
Technical analysis: Bounced back from its 21-EMA
Risk factors: Overvaluation concerns, high ESG risk rating
Buy at: ₹1,493.5
Target price: ₹1,690 in three months
Stop loss: ₹1,390
Buy: DLF Ltd (current price: ₹687)
Why it’s recommended: Surge in luxury residential demand, expansion of rental income portfolio
Key metrics: P/E: 93.12, 52-week high: ₹968, volume: ₹234.08 crore
Technical analysis: downward sloping trendline breakout
Risk factors: Market concentration in NCR, regulatory, and approval delays
Buy at: ₹687
Target price: ₹780 in three months
Stop loss: ₹645
How Nifty 50 performed on 2 May
On Friday, Nifty 50 traded with increased volatility but managed to hold above 24,300, maintaining its broader uptrend. Despite sharp intraday fluctuations the index remained resilient, reflecting underlying bullish sentiment.
The index formed a ‘doji’ candle with a long upper shadow on the daily chart, indicating ongoing indecision as profit-booking emerged at higher levels. The index has now formed its third consecutive bullish candle on the daily chart, indicating sustained strength and positive market sentiment.
Barring Nifty Media and IT, all major sectoral indices closed in the red, with consumer durables, metal, pharma, and realty the biggest losers. The advance-decline ratio turned negative and settled at 7:10.
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Technically, Nifty 50 continues to trade comfortably above its 200-DMA. The RSI remains in the bullish zone, around 65. However, its slope turned sideways on Friday. The MACD is trending above the central line with a positive crossover. Both the weekly RSI and MACD are trending upward, indicating continued bullish momentum.
According to O’Neil’s methodology of market direction, Nifty50 transitioned from a “rally attempt” to a ‘confirmed uptrend’.
The index remained volatile and faced strong resistance around 24,400. Intraday pullbacks from higher levels indicate persistent supply pressure, suggesting the need for near-term caution.
From a technical standpoint, the index struggled to sustain above 24,400. A decisive breakout above this resistance zone could pave the way for an upward move toward the 24,700–24,900 range. On the downside, key support is established around 24,000–23,900; a breach below this zone may trigger increased selling pressure and further downside risk.
How did Nifty Bank perform?
On Friday, Bank Nifty opened on a mildly positive note at 55,100.95. However, it was volatile throughout the session, oscillating between an intraday high of 55,691.95 and a low of 54,994.40 before closing at 55,115.35. Despite the choppy trade, the index managed to end the day with a modest gain of 28 points, forming a small bullish candle on the daily chart. From a broader perspective, the weekly chart reflects sustained strength, with the index forming its third consecutive bullish candle, indicating continued positive momentum.
From a technical perspective, Nifty Bank continues to trade above all its key moving averages, indicating underlying strength. However, the index has been consolidating over the past week, reflecting a pause in momentum.
On the daily chart, the RSI remains in positive territory but has weakened from 73.89 to 67.16 over the past week, signaling a potential slowdown in bullish momentum. Similarly, the MACD continues to trade above the central line with a positive crossover, though it is now inclining toward the signal line, suggesting early signs of diminishing upside strength.
According to O’Neil’s methodology of market direction, Nifty Bank transitioned from an ‘uptrend under pressure” to a ‘confirmed uptrend’.
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Nifty Bank continues to exhibit a positive outlook while consolidating within a well-defined range. The short-term trend remains bullish, provided the index remains above the key support zone of 54,500–54,000. On the upside, immediate resistance is seen at 56,000, and a decisive breakout above this level could trigger a rally toward 57,500–58,000. The broader bullish bias is expected to remain intact as long as the index holds above the 54,000 mark.
MarketSmith India is a stock research platform and advisory service focused on the Indian stock market. It offers tools and resources to help investors make informed decisions based on the CAN SLIM methodology, founded by legendary investor William J. O’Neil. You can access a 10-day free trial by registering on its website.
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