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Below the Quote on Pre-market comment for Thursday May 21 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 23,806, up by 140 points. Global equities gained momentum after a strong rally on Wall Street, supported by easing bond yields and softer crude oil prices, as investors turned optimistic over a possible resolution to the ongoing Middle East conflict.

In the previous session, The Nifty 50 staged a sharp recovery of nearly 260 points from its crucial support zone around 23,400 and ended marginally higher on May 20. The formation of higher lows on the intraday charts indicates that support levels are gradually shifting higher, although the broader trend remains cautious.

Technically, the Nifty formed a bullish candle after a gap-down opening, reflecting healthy buying interest from lower levels. However, the index continued to trade below all key moving averages including the key EMAs, all of which remain downward sloping, indicating that the broader trend is still under pressure.

The index also remained below the 38.2 percent and 23.6 percent Fibonacci retracement levels of the April rally, suggesting that the recovery is yet to confirm a trend reversal. Momentum indicators, however, showed signs of improvement. The RSI rose to 45.64 but remained below the signal line, while the MACD stayed below the reference and zero lines. The red histogram bars continued to shrink for the fifth consecutive session, indicating weakening bearish momentum.

As long as the Nifty sustains above the 23,400 support zone, recovery attempts may continue in the near term. The immediate hurdle is placed around 23,800, which coincides with the 20-day EMA and previous week's high. A decisive move above this level may open the path toward 23,900–24,000, which remains a crucial resistance zone. However, failure to cross 23,800 could keep the market in a broader consolidation phase.

Derivatives data indicates improving sentiment. The Nifty Put-Call Ratio (PCR) jumped to 1.24 on May 20 from 1.10 in the previous session, reflecting aggressive put writing activity and improving confidence among traders at lower levels.

India VIX, the market fear gauge, declined 1.26 percent to 18.44 and extended its downward trend for another session. The volatility index also slipped below its short- and medium-term moving averages, indicating improving comfort for bulls. However, a sustained move below the 18 mark will be necessary for stronger bullish confidence to return.

Option chain positioning suggests immediate support near the 23,400 strike due to fresh put writing, while resistance is visible around the 23,800–24,000 zone where call writers remain active

The Nifty Bank also mirrored the benchmark index and gained 0.3 percent after recovering from weak opening levels. The banking index formed a sizeable bullish candle on the daily chart, indicating buying interest emerging at lower zones.

However, Bank Nifty continued to trade below all key moving averages, all of which remained downward sloping, indicating that the broader structure remains weak. The index also sustained below the 50 percent Fibonacci retracement level of the April rally.

Immediate support for Bank Nifty is placed around 52,800–52,200, while resistance is seen near 54,500–54,600. A sustained move above resistance levels will be required for stronger recovery momentum in the banking index.

Overall, the technical setup suggests a positive opening supported by strong global cues and easing volatility. While momentum indicators indicate weakening bearish pressure, the broader trend remains cautious as the benchmark indices continue to trade below key moving averages. A decisive breakout above 23,800 on Nifty will be crucial for further upside momentum in the coming sessions.

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