There is an air of apprehension around the markets as India launches “Operation Sindoor”, striking nine terror camps across Pakistan in response to the deadly Pahalgam attack. The airstrike, launched in response to the April 22 Pahalgam terror attack that killed 26, triggered artillery exchange along the LoC.
The Ministry of Defence clarified that no Pakistani military installations were hit. For markets, which dislikes uncertainty, this fresh escalation adds another layer of uncertainty. The key question is will the Nifty hold 24,000 in trade today? Key experts believe that the Nifty is likely to take a breather, but a complete U-turn is unlikely.
On May 6, the Nifty closed at 24,379.60, down 0.33%, forming a bearish engulfing pattern.
Still, the broader uptrend remains unbroken. The index continues to stay above all its key moving averages. But analysts warn that if it slides below 24,240, that support could turn into a resistance zone, making recovery tougher.
“We had lowered our upside target yesterday, in light of the distribution signals and loss in upside momentum. While yesterday’s slippage was held near 24400-350 region, our downside marker, only 23.8% of Nifty 500 stocks are now above their 10 day SMAs, pointing to a turn in trend in the broader market, exposing 23670-23460 on the Nifty. In the event of a sharp crack down, we expect 23,930 -24,050 to provide a window for Nifty to consolidate. Alternatively, if dips do not extend past 24280, expect a quick recovery swing higher,” said Chief Market Strategist, Geojit Investments Limited.
“The overall trend is still positive, the current dip appears to be a regular pullback, which might extend into the next session,” said Mehra, Technical Research Analyst, SAMCO Securities.
The RSI is hovering near 65, a neutral zone, not flashing any extreme warning yet.
Watch these levels: 24,200 support, 24,530 resistance
From a technical lens, 24,200 is a key level to watch. It aligns with the hourly Supertrend and a trendline break, meaning if this level doesn’t hold, Nifty could drop toward the 24,050-24,000 zone.
“However, Nifty still holds above all the key moving averages, keeping the broader trend intact. Yet, if it falls below 24,240, the 9 EMA may no longer act as support and could turn into a barrier for any recovery attempt,” added Mehra.
Meanwhile, the upside barrier stands at 24,530, a resistance the index must conquer to regain bullish momentum.
Adding to the tension is a spike in volatility. India VIX jumped 3.6% to settle at 19. A move beyond 21 could make the downside more volatile and drag Nifty into deeper correction territory, noted Mehra.
Asian markets stays mixes as global eyes on Trade talks
While India faces tension at the border, Asian markets offered a mixed picture. Japan’s Nikkei 225 opened higher but soon turned red, slipping 0.2% to 36,757. South Korea’s Kospi held ground, rising 0.43% to trade at 2,570 and Taiwan Weighted was up 0.34%, trading near 20,592.