Nifty Stabilises After Recent Rally, Eyes Further Upside

Indian equity markets showed signs of consolidation after the recent sharp rally, with benchmark indices holding key support levels and volatility continuing to cool off. While higher levels remain challenging, the overall setup suggests stability at lower zones with a positive bias.

Nifty 50: Holds Support, Range-Bound but Constructive

The Nifty 50 ended the session at 25,776.00, up 0.19%, extending its stabilisation after the recent rally. The index formed a bullish candle on the daily chart, reflecting steady buying interest near support levels, although resistance at higher zones continues to cap upside momentum.

Technical Structure

• Nifty is trading above the 20-day SMA, indicating short-term strength
• However, it remains below the 50-day SMA, keeping the broader structure range-bound
• On the hourly chart, the index is forming a base around the 25,600 zone, suggesting accumulation at lower levels

Momentum & Volatility

• RSI on the daily chart has recovered to around 54, pointing to improving momentum
• DMI setup shows the positive directional line regaining strength, though trend intensity remains moderate
• India VIX declined for the third consecutive session to 12.25, highlighting a continued contraction in volatility

Key Levels to Watch

• Immediate support: 25,600–25,550, followed by 25,500
• Resistance: 25,900, followed by the psychological 26,000 mark

The presence of an unfilled gap below current levels continues to act as an important short-term support. With the index forming a base, a buy-on-dips approach may be preferred for the next session.

Nifty Bank: Consolidates Near Record Levels, Trend Remains Bullish

Nifty Bank closed at 60,238.15, up 0.33%, after spending the session consolidating near record highs. The index opened firm, tested higher levels intraday, and managed to close comfortably above the psychological 60,000 mark.

Technical View

• The index is trading above all key moving averages, confirming that the broader trend remains bullish
• It is also holding above the falling trendline, reinforcing the positive structure

Fibonacci & Short-Term Setup

• On the hourly chart, Nifty Bank retraced sharply toward the 0.382 Fibonacci level near 60,244
• Post this retracement, the index has entered a sideways consolidation phase above the 0.236 retracement, indicating digestion of recent gains rather than trend exhaustion

Momentum Indicators

• RSI on the daily chart is placed near 57, reflecting steady momentum
• DMI shows the positive directional line moving back above the negative line
• ADX remains moderate, suggesting consolidation rather than a strong trending phase

Key Levels to Watch

• Immediate support: 59,900
• Stronger support: 59,750 (near the 0.618 Fibonacci retracement)
• Resistance: 60,450–60,500, followed by 60,650

While Nifty Bank remains positioned near record highs, the index is currently in a consolidation phase. A decisive breakout above resistance will be key in determining the next directional move. Until then, a buy-on-dips strategy remains favourable.

Market Outlook

Both Nifty and Nifty Bank are showing signs of stability after the recent rally, supported by declining volatility and improving momentum indicators. However, resistance levels remain crucial hurdles for further upside.

As long as key supports are respected:

• The broader bias remains positive
• Consolidation is likely to resolve on the upside
• Volatility is expected to stay contained

Traders may continue to buy on dips, while keeping a close watch on resistance zones for confirmation of the next leg of the move.