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Below the Pre-market comment for Wednesday May 6 by Aakash Shah, Technical Analyst, Technical Research Analyst, at Choice Broking

Indian equity markets are expected to open on a strong positive note, with Gift Nifty trading at 24,318, up by 208 points. Asian markets also opened higher, tracking strong gains in the US markets overnight, which is supporting early sentiment.

In the previous session, the Nifty 50 declined by around 0.4% in the previous session, witnessing a volatile trading day but continuing to trade within the broader range of 23,800–24,350. The index has now hovered around its short- and medium-term moving averages for multiple sessions, indicating lack of strong directional conviction. Ongoing geopolitical tensions and firmness in crude oil prices continue to cap upside momentum.

From a technical standpoint, momentum indicators remain mixed. The RSI is moving sideways near the 50 mark, reflecting neutral momentum, while the MACD histogram is showing shrinking positive bars, indicating weakening bullish momentum. The 24,000 level, which coincides with the 20-day EMA, is acting as a crucial pivot for the market. A decisive breakdown below this level could lead to further downside toward 23,800 and 23,500. On the upside, a sustained move above 24,350 may trigger a rally toward 24,600.

Derivatives data indicates a mildly positive undertone. The Put Call Ratio (PCR) stands around 1.15, suggesting higher put writing activity and a supportive base for the market. India VIX is placed around 17.9, remaining elevated but stable, which signals the possibility of continued intraday volatility without extreme fear. 

Option chain positioning highlights strong support near the 24,000 strike due to significant put writing, while resistance is visible in the 24,300–24,500 zone where call writers are active. This further reinforces the current consolidation band.

In terms of price structure, Nifty is forming a sideways consolidation pattern near the highs, indicating absorption of supply but lacking breakout confirmation. The index continues to trade within a tight range, suggesting a buildup for a potential directional move.

Bank Nifty continues to exhibit relative strength but has entered a consolidation phase after the recent uptrend. As per observations, the index is forming a range-bound structure with signs of profit booking at higher levels. Immediate support is placed around 54,300–54,000, while resistance is seen near 55,400–56,000. The ongoing formation suggests consolidation near highs, and a breakout above this resistance zone is required for continuation of the bullish trend.

Overall, the technical setup indicates a positive opening followed by range-bound and volatile trade. The broader trend remains constructive, but the short-term structure suggests consolidation with key levels acting as triggers. The immediate range for Nifty is seen between 23,800 and 24,300. A decisive breakout on either side will determine the next directional move.

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