Nifty Attempts Base Formation After Recent Correction; Banking Indices Show Stabilisation

Indian equity benchmarks showed signs of stabilisation after the recent corrective phase, with both Nifty 50 and Nifty Bank rebounding from lower levels. While volatility remains elevated, technical indicators suggest that selling pressure is gradually easing, and the indices are attempting to form a near-term base.

Nifty 50 Technical Outlook: Early Signs of Stabilisation

The Nifty 50 index closed at 25,342.75, registering a gain of 0.66% for the session. The index staged a recovery from recent lows and formed a bullish candle, closing near a previously observed rejection zone. Importantly, Nifty rebounded strongly from the lower Bollinger Band, indicating the presence of buying interest at lower levels.

Nifty is currently holding above the 23.6% Fibonacci retracement level at 25,250, which is emerging as a key short-term support. However, the index remains below the 20-day moving average, suggesting that the broader trend is still in a corrective phase.

Momentum Indicators Signal Cooling Bearish Pressure

• The Relative Strength Index (RSI) has bounced from oversold territory and is now hovering in the 40–41 zone, reflecting a moderation in bearish momentum.
  
  
• The Stochastic Momentum Index (SMI) is slowing and hinting at a potential reversal, although confirmation is still awaited.
  
  
• On the hourly chart, Nifty has formed a double-bottom pattern, reinforcing the view that selling intensity has reduced near current levels.
  

Key Support and Resistance Levels for Nifty

• Immediate support: 25,250–25,180
  
  
• Immediate resistance: 25,500
  
  
• Major resistance: 25,600 (mid-Bollinger Band and short-term averages)
  

Sustaining above the 25,250 level will be crucial for Nifty to build on the recovery and attempt a gradual move toward higher resistance zones.

Nifty Bank Outlook: Recovery Holds Key Averages

The Nifty Bank index settled at 59,598.80, rising 0.66% after recovering from intraday lows. The index opened on a positive note, slipped in the first half, but later regained momentum to close above the VWAP at 59,512 and the 20-day moving average.

Notably, Nifty Bank is now holding above the mid Bollinger Band, which signals improving stability following the recent decline.

PSU Banks Outperform Private Banks

• Nifty PSU Bank index outperformed, gaining 1.68% to close at 9,085.80.
  
  
• Nifty Private Bank index posted a modest gain of 0.56%, ending at 28,440.80.
  
  

This divergence suggests selective buying interest, with PSU banks attracting relatively stronger participation.

Momentum Indicators and Levels to Watch

• The RSI has moved back toward the 52–53 zone, indicating improving momentum.
  
  
• The SMI remains below the zero line, but its recent uptick suggests that downside momentum is pausing.
  
  

Key levels for Nifty Bank:

• Support: 59,200–59,000
  
  
• Resistance: 59,850–60,000
  

Holding above 59,500 remains critical for any meaningful continuation toward higher levels. Failure to sustain above this zone could keep the index trapped in a narrow and volatile range.

Market Outlook

Both Nifty and Nifty Bank are attempting to stabilise after the recent correction. While early technical signals point toward base formation, confirmation will require sustained price action above key support levels. Until then, markets are likely to remain range-bound with heightened intraday volatility.

Traders are advised to stay selective and disciplined, focusing on defined levels rather than chasing short-term momentum.