Trade Setup for May 8: Nifty bulls eye upside towards 24,800 after closing above 24,300

The benchmark Nifty 50 index extended its recent pattern of alternating gains and losses on Thursday, May 7, slipping marginally by 4 points to close at 24,326 after Wednesday's sharp rally.

The index opened 68 points higher and climbed to an intraday high of 24,482 in early trade. However, repeated failures to decisively cross the crucial 24,400 mark triggered profit booking in the latter half of the session.

The Nifty eventually erased most of its gains, retreating nearly 189 points from the day's high.

Among index heavyweights, HDFC Life Insurance Company, Bajaj Auto and Mahindra & Mahindra emerged as the top gainers, while Hindustan Unilever, Tata Consultancy Services and Titan Company were among the major laggards.

Sectoral trends remained mixed through the session. Auto, Realty and Financial Services indices outperformed, while Consumer Durables, IT and FMCG stocks witnessed selling pressure.

Broader markets continued to outperform the benchmark, with the Nifty Midcap 100 index rising 1.1% and the Nifty Smallcap 100 gaining 0.9%.

Meanwhile, the Indian rupee strengthened for a second consecutive session, appreciating 36 paise to settle at 94.25 against the US dollar. The move was aided by gains in Asian currencies, easing crude oil prices and steady dollar inflows through domestic banks.

Softening crude prices, amid hopes of a possible diplomatic breakthrough between Washington and Tehran, also helped ease inflation concerns and supported overall sentiment.

According to Nandish Shah of HDFC Securities, despite the second-half profit booking, the broader technical structure remains positive, with the Nifty sustaining the uptrend initiated in the previous session.

Shah sees immediate support near the 24,000 mark, while resistance is placed around 24,600.

Nagaraj Shetti of HDFC Securities said a decisive move above 24,400 could open the door for further upside towards 24,600 and eventually 24,800 in the near term. Immediate support is seen at 24,200.

Rupak De of LKP Securities said the Nifty has witnessed a consolidation breakout on the daily chart, indicating improving market sentiment. The index has also moved above its 50-day EMA, suggesting strengthening momentum.

De expects the index to remain firm in the short term, with potential upside towards 24,750-24,800. On the downside, support is placed at 24,200, below which momentum may weaken.

Meanwhile, the Bank Nifty traded within a narrow 551-point range, its tightest trading band since April 22, before ending the session marginally higher by 0.12% above the 56,000 mark.

Sudeep Shah of SBI Securities said the 56,400-56,500 zone will remain a key resistance area for Bank Nifty. A sustained breakout above 56,500 could trigger a sharper rally towards 57,200 and eventually 58,000 in the short term.

On the downside, the 55,600-55,500 zone is expected to provide immediate support and cushion any near-term corrective move.