Nifty Forms Bullish Engulfing, Targets 24,660 Breakout for Further Upside

The domestic equity market ended on a positive note, with Nifty closing at 24,585.05, up 0.91% on the day. The index bounced sharply from the swing low of 24,347.45, forming a bullish engulfing pattern on the daily chart a signal that short-term sentiment may be improving.

Technical Setup – Nifty

• 9-EMA Test: The index is attempting to reclaim the 9-day exponential moving average (EMA) at 24,630.
  
  
• Resistance Still in Place: Nifty remains below both the 20-EMA and the 50-SMA, suggesting the broader corrective phase is still intact.
  
  
• Key Support Zone: The index has reclaimed the 100-EMA, offering a strong initial support layer.
  
  

The Fibonacci Factor

Connecting the recent swing high and low puts the 23.6% Fibonacci retracement at 24,660. Sustaining above this zone will be critical for a continued move higher.

• RSI: Daily Relative Strength Index has improved to 42 from 35, indicating mildly improving momentum.
  
  
• MACD: Still negatively skewed, showing that bullish conviction is yet to fully return.
  
  

Hourly Chart Signals

• Double Bottom Formation: Indicates the possibility of a short-term reversal.
  
  
• Upside Targets: A sustained move above 24,660 could open the path toward 24,750–24,800.
  
  
• Consolidation Risk: Failure to clear 24,660 may keep the index rangebound.
  
  

Support Levels: 24,480 and 24,440.
Strategy: Near-term bias favours buy-on-dip, but a close above 24,600 for two consecutive sessions will be crucial for confirmation.

India VIX – Calm Under 13

The India VIX closed at 12.22. As long as it remains below 13, market volatility is likely to stay contained, favouring rangebound to mildly bullish conditions.

Bank Nifty Outlook

Closing: 55,510.75 (+0.92%)

The Bank Nifty also staged a recovery, rebounding from recent declines and forming a bullish harami pattern on the daily chart.

• Support Zone: The rebound was supported by the 100-EMA near 54,950, which has held firm during the correction.
  
  
• Resistance: Immediate resistance is placed at 55,660.
  
  
• EMA & SMA Positioning: The index is still below the 20-EMA and 50-SMA, suggesting the short-term trend hasn’t fully reversed.
  

Momentum Indicators

• RSI: Improved to 42 from oversold territory.
  
  
• MACD: Still struggling to recover from lower levels.
  

Hourly Chart View

A double bottom formation hints at a potential short-term reversal if the 55,660 resistance is breached.

• Upside Potential: A breakout could push the index toward 55,800–56,000.
  
  
• Range Risk: Failure to cross above 55,660 may keep it oscillating in a narrow band.
  
  

Support Levels: 55,150 and 54,950.
Trading Bias: As long as the 54,950–55,150 zone holds, bias may shift toward buy-on-dip, with a sustained close above 55,660 being the trigger for bullish momentum.