Nifty Breaks Resistance at 25,200; Momentum Turns Constructive

After several sessions of sideways movement, the Nifty 50 index finally broke out of its consolidation range, closing decisively above the short-term resistance level of 25,200. The index ended the day at 25,244.75, up 200.40 points or 0.80%, signaling a constructive shift in sentiment.

Technical Overview: Bullish Bias Strengthens

• Breakout Confirmed: Nifty’s close above 25,200 breaks the recent range-bound structure and opens the door for further upside. It marks the end of multiple failed attempts to breach this level.
  
  
• Support Levels: The index is now comfortably trading above the 9-day and 20-day EMAs, with the 20-day EMA acting as a firm cushion around the 25,000 zone.
  
  
• Supertrend Indicator: The daily Supertrend support has moved higher, providing a protective trailing support base for the short term.
  
  
• Momentum Indicators:
  • RSI (Relative Strength Index) is now holding above the 60 mark, suggesting strengthening momentum.

• MACD is on the verge of a bullish crossover, which could confirm a short-term trend reversal if the follow-through continues.

• Volatility Drop: India's VIX declined sharply by 5% to 12.96, signaling a reduction in fear and an improvement in risk appetite.

Levels to Watch

• Upside Target: If Nifty sustains above 25,200, the next resistance zone lies between 25,330 and 25,410.

• Support Zone: On the downside, immediate support is now placed around 25,100 – 25,000.

Bank Nifty: Stable Structure, Awaiting Stronger Move

Bank Nifty closed at 56,621.15, up 0.28%, showing signs of a steady rebound within its rising channel. While the move wasn’t as strong as Nifty’s, the index continues to respect key short-term averages.

• Support Levels: The 9-day and 20-day EMAs are acting as short-term support zones, with the 50-day EMA gradually catching up.
  
  
• Momentum Indicators: The RSI has moved above 60, indicating a healthy accumulation of momentum.
  
  
• Key Levels:
  • Immediate Resistance: 57,000 (upper boundary of the rising channel)
  • Support: 56,200 (lower band of the channel)

Strategy for Traders: Buy on Dips

With volatility easing and momentum turning in favor of the bulls, a "buy on dip" strategy remains the preferred approach. Dips toward the 25,100–25,000 zone in the Nifty or 56,200 in the Bank Nifty may offer opportunities for long positions, with tight stop-losses placed below key support levels.

Conclusion

The breakout in Nifty and stability in Bank Nifty suggest the tide may be turning back in favor of bulls. Momentum indicators are aligning, volatility is cooling off, and short-term averages are providing strong base support. As long as the index holds above 25,200, the broader tone remains constructive.