Nifty Stalls Near the Crest as Momentum Cools; Profit Booking Emerges After a Strong Rally

After a strong, consistent upmove in recent weeks, the Nifty index paused its momentum on Monday, ending the session lower as traders booked profits near key resistance levels. The index slipped below its intraday support level, suggesting a short-term cooling-off phase within its broader uptrend.

Nifty Index Overview

The Nifty 50 closed the session at 25,877.85, down 0.68%, forming a bearish candle on the daily chart. This pattern indicates that the index faced resistance near the 26,000 mark, where a double top has formed, signaling short-term indecision among market participants.

Despite the decline, the index continues to respect the upward-sloping trendline drawn from the mid-October lows, reaffirming that the broader structure remains intact. On the hourly chart, Nifty is forming a narrow consolidation channel, suggesting the current move is likely a time-based correction rather than a structural reversal.

The RSI has cooled to around 64, reflecting a gradual moderation in momentum, while the MACD still remains above the signal line, a sign that the underlying trend continues to favor the bulls.

• Support levels: 25,800–25,700
  
  
• Resistance levels: 26,000–26,050
  
  

A decisive move beyond either of these levels could determine the next directional phase. For now, a cautious trading approach is advisable as the market digests recent gains.

Nifty Bank: Mild Profit Booking After Recent Gains

The Nifty Bank index also took a breather after its robust performance in the previous sessions, closing at 58,031.10, down 0.61%. The index formed a bearish candle on the daily chart, signaling a short-term pause in the ongoing rally.

While the index faced some resistance near the upper range, it continues to hold comfortably above its short-term moving averages, reaffirming that the primary trend remains bullish.

On the hourly chart, a mild negative divergence has emerged, indicating a brief slowdown in momentum. However, the Supertrend indicator near 57,850 provides strong support, ensuring the bulls retain control as long as this level holds.

The daily RSI has eased to around 67, showing that momentum is stabilizing after hovering near overbought territory.

• Support levels: 57,800–57,600 (aligned with the 23.6% Fibonacci retracement level)
  
  
• Resistance levels: 58,350–58,450, followed by the all-time high at 58,577
  
  

As long as the index sustains above 57,600, the overall trend remains bullish. However, a close below this zone may invite short-term correction or sideways consolidation in the coming sessions.

Technical Outlook: Consolidation Before the Next Move

Both Nifty and Nifty Bank are undergoing a healthy consolidation phase after strong rallies. While short-term indicators suggest cooling momentum, the medium-term trend remains bullish.

The current phase can be viewed as a natural pause within an uptrend, allowing the market to absorb recent gains before attempting a renewed move toward record highs.

Traders are advised to stay selective and adopt a buy-on-dips strategy near strong support levels while keeping a close watch on key resistance breakouts for potential upside opportunities.

Market Sentiment

Despite the short-term weakness, the overall market sentiment remains constructive. Volatility remains muted, and both institutional and retail flows continue to support the market’s strength. The broader price structure indicates that as long as Nifty holds above 25,700 and Nifty Bank above 57,600, the bullish bias remains intact.

Key Takeaways

• Nifty formed a double-top near 26,000, signaling temporary resistance.
  
  
• Profit booking is seen in both Nifty and Nifty Bank after substantial gains.
  
  
• Uptrend structure remains intact above key support zones.
  
  
• Traders should maintain a cautious buy-on-dips approach with strict stop-loss levels.