Monday’s trading session began on a grim note for Dalal Street. The NIFTY50 opened with a steep gap-down of nearly 600 points. However, the index managed to recover in the final hour of trade, clawing its way back above the crucial psychological mark of 24,000 before the closing bell.
However, early indications for Tuesday suggest a more optimistic opening for the benchmark index. One key factor behind the improved sentiment is the sharp reversal in crude oil prices.
ALSO READ| Gold, silver prices fall in Kolkata despite Iran war pushing crude oil above $100
Global cues also turned supportive overnight
US markets, which initially opened deep in the red, managed to recover strongly and ended the session in the green. Asian markets followed a similar pattern.
Donald Trump suggested that the war in Iran could be nearing its end, adding that reopening the Strait of Hormuz would hugely improve economic prospects for Asian economies that rely heavily on energy imports.
On Monday, the NIFTY50 briefly slipped below the breakout trendline that was established in April 2025. However, the index managed to regain stability and ultimately closed above the key trendline support at 23,700 while defending the psychological support level of 24,000.
Analysts believe that the 23,700 trendline could continue to act as a downside cushion in the near term. On the upside, the next immediate resistance level for the index is seen around 24,500.
On the daily chart, the gap between the price and the 20-day Exponential Moving Average (EMA) widened beyond 5%. Historically, such stretches have often been followed by a rebound toward the 20 EMA in subsequent sessions.
Just last April 2025, following tariff announcements, when the NIFTY50 dropped more than 5% in just two sessions but subsequently recovered by about 5% over the next four trading days.
Options data provides further clues about market positioning ahead of Tuesday’s session. The 24,500 call option currently carries the highest open interest. On the downside, the 23,800 put strike holds the highest open interest, indicating a strong support area for the index.
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