Can Nifty hit an all-time high in May? Here’s what top technical analysts think

Nifty hit its all-time high of 18,887.60 on December 1, 2022. At present, it is near 18,300 and technical analysts believe if the uptrend sustains, the benchmark index can hit the all-time high level by the next month.

We talked to several technical analysts to understand what could be the range of Nifty in May. Take a look at what they said:

Osho Krishan, Sr. Analyst- Technical & Derivative Research, Angel One

The technical structure of the benchmark index looks robust as it hovers near the upper band of the consolidation zone from the past few trading sessions. 

As far as levels are concerned, 18,500 is very much in the vicinity, and expect new highs beyond 19,000 very soon. 

However, it would be very difficult to project a time period to unlock this achievement. 

On the derivatives front, a decent piling of open interest (OI) is seen at 18,000-18,200 put strikes indicating a strong base setup for Nifty. 

On the higher end, call writers could be seen at the 18,500 CE strike on an immediate basis. 

The recent developments construe a positive setup for the benchmark index; however, post the steep rally, the index has entered overbought territory on the technical front. 

Hence, one should not rule out the possibility of some cool-off in the coming period. 

From the broader May month expiry point of view also, the highest OI build-up can be seen at 18,000 PE, aligning with the near-term view. 

And on the higher front, call writers are piling positions at 18,500 CE followed by 19,000 CE which could be seen as an encouraging sign for the bulls. 

Considering the data, the overall sentiments remain robust till Nifty firmly withholds the 18,000 mark and any short-term blip could be seen as an opportunity to add longs in the system.

Rohan Patil, Technical Analyst, SAMCO Securities

Nifty has continued its upward momentum post the bullish pole flag pattern breakout on the weekly chart. 

Prices have just shown a single candle retracement and the trend resumption candle signals, the bulls are in control of the momentum and this may prolong towards higher levels.

The weekly strength indicator RSI and momentum oscillator Stochastic, both have turned positive and are sustaining above their respective reference lines.

Overall, it is an optimistic month so far, as Nifty Bulls enjoying a rally from their lower levels of 17,600. 

Prices have shown a strong breakout from the prior resistance zones and gained close to 4 per cent in just three weeks.

Having moved above the hurdle and the overall positive chart pattern indicates the next upside for Nifty between 18,500 – 18,600 levels in the May expiry. 

Immediate support is at 18,000 levels. On the flip side, if the 18,000 level is getting breached then 17,850 will be the level to watch out for.

Anand James, Chief Market Strategist at Geojit Financial Services

Patterns suggest that the hot streak is likely to continue for the year, and a new peak is not afar. 

However, there are two reasons why we may not see much beyond 18,500 soon, and probably gravitate towards 18,000 in the second half of May. 

First is that VIX has started to rise. This is something that we have not seen during the past 1,500 points, ever since Nifty turned higher from 16,800 levels in late March. 

Second is the relative positioning with respect to 50DMA which is 4.5 per cent lower, the farthest that it has been, since Nifty dropped from its lifetime peak in November 2022.

Rahul Ghose, Founder & CEO – Hedged, an algorithm-powered advisory platform

The Nifty view for the month of May is sideways with a bullish bias. The index currently has the highest put writers at the 18,000 level. 

The sheer magnitude of these put writers coupled with the fact that the 20-day exponential moving average is at that very point of 18,000 makes this a very strong support for the Index. 

Secondly, the derivative data currently indicate that the short straddles for this monthly expiry are at the 18,300 level with the highest number of call writers at the 18,500 call, which further corroborates this hypothesis. 

Also, the stochastic momentum indicator is slowing in the overbought section with the move in the index for the past couple of days which tends to indicate that a runaway rally is not likely immediately. 

All these factors lead to the conclusion of the trend is up with a sideways bias.

Arvinder Singh Nanda, Senior Vice President of Master Capital Services

The market is likely to approach 18,500-18,700 on the upside as it has managed to break the key resistance of 18,300. 

Profit booking can be witnessed at 18,500-18,700 levels. Any pullback in the upcoming days around the level of 18,200-18,300 should be seen as a buying opportunity. 

Although the market can face some resistance around 18,500-18,700 levels, once the market breaches these levels, we can witness a further upsurge towards 18,800 and then 19,000. 

On the downside, a sustainable fall below 18,200 will take such a decline towards 18,000-17,800 which if broken decisively will extend the downwards till 17,600

Support for Nifty: 18,200; 18,000; 17800

Resistance for Nifty: 18,500; 18,700; 18,900

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Aditya Gaggar, Director of Progressive Shares

After making an all-time high of 18,887.60 in December 2022, a corrective move was witnessed in the index through a lower top-lower-bottom formation. 

Recently, the index has not only breached the falling channel formation but has also given a strong breakout from the reversal pattern known as the inverted head and shoulder formation. 

Indicators such as RSI is supporting the price behaviour by replicating the index formation. 

Trend following indicator MACD has also given a positive crossover which confirms the price activity. 

On the daily timeframe, the index has been moving in the rising channel and considering these patterns, one should follow buy on dips strategy for a target of 18,860.

Shrey Jain, founder and CEO of SAS Online

The Nifty has been trading above its 20-month moving average, which has acted as strong support during previous corrections, indicating the continuation of the bullish trend.

In the short term, the Nifty has been trading above its 10-day and 20-day exponential moving averages, indicating short-term strength. The immediate resistance level for the Nifty is at 18,900 – 19,000, which is an all-time high and also a psychological level.

However, traders should keep an eye on the RSI (Relative Strength Index) indicator, which has been in the overbought zone for a prolonged period, indicating a possible pullback or correction. In case of a correction, the first support level for the Nifty is at 18,000, followed by 17,800.

S. K.Hozefa, CEO, Tradeplus

Nifty formed a morning star Doji set up at the end of March. This pattern indicates a potential reversal from a bearish trend to a bullish one, suggesting a positive outlook for the month of May.

In April, Nifty found crucial support at the 17,300 level, which is significant and should be closely monitored. This support level suggests that the market has the potential to sustain its upward momentum.

Nifty has successfully maintained key levels around 18,000 in the current month. This level is important and could act as a strong support going forward.

By analyzing both the monthly and weekly charts, it is observed that the proper setup of the morning star Doji is visible. Additionally, on a bi-weekly basis, the maximum put open interest (OI) is concentrated around the 18,000/18,100 levels. This indicates that these levels might serve as significant support levels in the near term.

While there may be news and potential impact in the market, it is anticipated that they will not have a substantial effect on the market for this month. Furthermore, it is worth noting that foreign institutional investors (FIIs) have displayed high bullish sentiment, consistently buying in the cash markets during the current month series.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.