Nifty Finds Support After Budget Sell-Off; Upside Still Faces Strong Hurdles

Market Recap

Nifty staged a sharp intraday recovery after the recent Budget-driven sell-off and closed the session at 25,088.40, gaining 1.06%. The rebound helped the index recoup a meaningful portion of the previous day’s losses, with prices settling near the higher end of the day’s range, reflecting improved buying interest at lower levels.

On the daily chart, Nifty formed a bullish candle, which—when combined with the prior session, results in a bullish harami pattern, signalling a pause in the recent downward momentum. On the hourly timeframe, the index has started forming a short-term base, with prices bouncing from the lower Bollinger Band toward the mid-band, suggesting stabilisation after the sharp decline.

The index is currently holding above the VWAP near 24,960, which acts as an important short-term cushion. However, the recovery remains tentative as Nifty continues to face multiple overhead resistances near key moving averages.

Volatility cooled off meaningfully during the session, with India VIX declining 8.15% to 13.86, offering some relief after the sharp spike witnessed on Budget Day.

Technical View: Support Holds, Trend Still Under Repair

From a technical perspective, the index has managed to defend its near-term supports, but the broader structure remains cautious. On the downside, 24,800 acts as the immediate support, followed by 24,700, which remains a crucial level to prevent renewed selling pressure.

On the upside, 25,250, where the 200-day simple moving average (SMA) is placed—emerges as a key resistance. A stronger hurdle is seen near 25,400, and a sustained move above these levels would be required to confirm a more durable recovery. Until then, the ongoing rebound is likely to remain corrective rather than trend-defining.

Nifty Bank: Mild Recovery, Range-Bound Bias Persists

Nifty Bank also witnessed a late-session recovery, closing at 58,619.00, up 0.35%. The modest rebound helped the index stabilise after recent weakness, though buying conviction remained limited.

The index formed a bullish candle while continuing to trade within a broader parallel channel. Importantly, Nifty Bank is holding above the lower boundary of this channel, keeping the broader trend intact as long as this support is respected. The index is also sustaining above the VWAP near 58,380, adding to short-term stability.

On the hourly chart, a short-term base formation is visible. The angled Fibonacci retracement—drawn along the rising trend—shows the index oscillating between the 0.25 and 0.382 retracement levels, suggesting a corrective phase within a broader uptrend, rather than a structural breakdown.

Momentum indicators remain mixed. The RSI is placed in the mid-40s, indicating subdued momentum, while the DMI setup continues to favour the negative side, with the negative directional line above the positive line.

Key Levels to Watch

Nifty

• Support: 24,800, then 24,700
• Resistance: 25,250 (200-DMA), followed by 25,400

Nifty Bank

• Support: 58,250, then 58,000
• Resistance: 59,000, followed by 59,200

Market Outlook

Both Nifty and Nifty Bank have found temporary support after the sharp sell-off, aided by cooling volatility and short-term base formation. However, the broader setup suggests that upside remains capped near key resistance zones. Sustained strength above these levels is required to signal a stronger recovery. Failing this, indices may continue to trade in a narrow and volatile range, with a selective and cautious approach likely to dominate near term.