Nifty Extends Relief Rally for Third Session as Volatility Eases

The Nifty 50 continued its recovery momentum, closing at 23,777.80, up 0.83%, marking the third consecutive session of gains after the recent sharp correction. The steady rise indicates short-term stabilisation supported by easing volatility.

Technical Setup Shows Gradual Improvement

On the daily chart:

• Nifty formed a positive candle, signaling continuation of the relief rally
• The index is now trading above the 0.236 Fibonacci retracement (~23,750)
• It is hovering near the 10 EMA, indicating improving short-term momentum

However:

• The index still trades below the middle Bollinger Band, suggesting the broader trend remains cautious

Momentum Indicators Strengthen

• RSI has improved to around 37, recovering from oversold levels
• MACD remains in negative territory, but the histogram is contracting, indicating weakening bearish momentum

Meanwhile, volatility continues to cool:

• The India VIX declined further by 5.39% to 18.72, supporting the ongoing rally

Key Levels to Watch for Nifty

Support

• 23,450 (crucial for sustaining recovery)

Resistance / Upside Targets

• 23,900 – 24,050
• As long as the index holds above 23,450, a buy-on-dip strategy may remain effective
• A break below 23,450 could invalidate the recovery and trigger fresh selling

Bank Nifty Continues Gradual Recovery

The Nifty Bank also extended its rebound, closing at 55,326.05, up 0.82%, reflecting easing selling pressure in the banking space.

Technical Signals Indicate Stabilisation

• The index has moved above the 23.6% Fibonacci level (~55,240)
• It is recovering from the lower Bollinger Band, re-entering the band range
• However, it remains below the mid-band, indicating the trend is still not fully bullish

Momentum Shows Early Recovery

• RSI has improved to around 35, indicating gradual strengthening after oversold conditions
• On the hourly chart, the index shows continuity in short-term uptrend

Key Levels for Bank Nifty

Support

• 54,750

Upside Potential

• Gradual recovery may continue if support holds
• Sustaining above 54,750 is crucial for maintaining the recovery
• A break below this level may bring back downside pressure

Market Outlook

Both indices are witnessing a relief rally supported by cooling volatility and improving momentum, but:

• The broader trend still remains corrective
• Key resistance zones are yet to be decisively broken
• The current move is best viewed as a short-term recovery within a larger downtrend

For now, the market favors a buy-on-dips approach, with close attention to key support levels.