The Nifty 50 delivered a sharp rebound on April 8, rising by 1.7 percent or 374 points, and ending a three-day losing streak. The surge was driven by value buying, short covering, and positive global market cues after the recent tariff-led correction. The index closed at 22,536, with the day's intraday high at 22,697 and low at 22,271, reflecting strong intraday volatility.

Market Structure and Technical Formation

The day’s candlestick pattern on the daily chart resembled a High Wave pattern—marked by long upper and lower shadows—signifying market indecision but also reflecting a positive reversal possibility. According to analysts, this pattern typically suggests the end of ongoing trends and a possible shift in momentum.

What’s more notable is that the sharp downside gap from the April 7 opening has been partially filled. This is significant because according to gap theory, such a gap can be classified as a bullish exhaustion gap, which often signals bottom formation.

Key Levels to Watch Ahead

• The next resistance level is 22,850, which is the upper end of the bearish gap seen on April 7.

• A decisive close above 22,850 could lead to a strong bullish continuation.

• On the downside, immediate support lies at 22,270, with critical support at 22,000.

• Volatility may persist as the index trades between these key levels.

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, stated that if the market sustains above 22,270 and begins to edge toward 22,850, the bullish reversal will gain strength, potentially triggering fresh long positions.

Options Data Hints at Trading Range

The weekly options data provides strong insight into market expectations:

• Maximum Call Open Interest is at 23,500, followed by 23,000 and 23,300, suggesting these are key resistance levels.

• Maximum Call writing occurred at 23,400, followed by 23,500 and 23,300, indicating selling pressure near these zones.

• Maximum Put Open Interest is concentrated at 22,500, followed by 22,000 and 22,200.

• On the Put writing front, 22,500 strike leads, followed by 22,400 and 22,300.

This data points to a likely trading range of 22,000–23,000 in the short term. A breakout beyond this range may provide clearer direction to traders.

Bank Nifty Reclaims Moving Averages with Strong Rebound

The Bank Nifty, mirroring the broader market, rose by 651 points (1.3 percent) to close at 50,511. The index witnessed a highly volatile session but managed to climb back above its 20, 50, 100, and 200-day EMAs, which is considered a bullish sign.

It formed a long-legged Doji-like candlestick, which often reflects indecision among traders, but the close above the previous day's high confirms underlying bullish strength.

Resistance and Support Levels for Bank Nifty

According to Anshul Jain, Head of Research at Lakshmishree Investments:

• Immediate resistance lies at 51,360, the upper end of the gap-fill zone.

• The monthly VWAP and 8-day EMA around 50,950 may act as a supply zone.

• Traders may book profits around 50,950, and any breach of this level on the upside may further fuel momentum.

• On the downside, holding 50,950 is critical to maintain bullish sentiment.

Volatility Index and Market Sentiment

The India VIX, an important measure of market volatility, dropped 10.31 percent to settle at 20.44. Although this is a positive drop, it still lies in the higher volatility zone.

For bulls to regain full control, the India VIX needs to fall below 14, which is typically seen as a comfort zone for sustainable upside in the market.

Until then, market participants should remain cautious, as high VIX implies continued intraday swings and potential profit booking at higher levels.

What Does This Mean for Traders and Investors?

This rebound provides a potential opportunity for investors and swing traders:

• Short-term investors can look for entries around support levels like 22,270, with a target toward 22,850 or above.

• Option traders must closely monitor open interest concentration, which currently defines the market range.

• Volatility spikes can create opportunities, but risk management remains crucial, especially with the VIX still elevated.

Conclusion

The Nifty 50’s strong comeback, supported by global market strength, short-covering, and value buying, indicates that bulls are attempting to reclaim control. However, technical resistance near 22,850 and elevated volatility could cap immediate upside.

Similarly, Bank Nifty’s bounce from key support zones and recovery above crucial moving averages gives further credence to a bullish bias, provided the supply zone near 50,950 is conquered and held.

In conclusion, markets are at a critical juncture, and traders must stay alert to key support-resistance levels, options data, and the India VIX for short-term cues.

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