Nifty Rebounds After Breaching 23,000; Relief Rally Emerges From Oversold Levels

Nifty Recovers Sharply in Final Hour of Trade

The Nifty 50 ended the session at 23,408.80, gaining 257.70 points (+1.11%), as the index staged a strong recovery in the final hour of trading after briefly breaching the 23,000 level during the session.

The rebound largely reflects a short-term pullback from extremely oversold conditions, following the recent sharp decline in the market.

Technical Indicators Signal Relief Bounce

On the daily chart, the index has shown a recovery after recent heavy selling pressure. However, the broader trend continues to remain under pressure.

Key technical signals include:

• RSI (Relative Strength Index) is placed near 29, indicating the market remains in an oversold zone.
• The DMI indicator still shows the negative directional line above the positive line, highlighting that the underlying weakness has not fully faded.

On the hourly chart, a bullish divergence has emerged, suggesting the possibility of a short-term rebound or consolidation phase.

Key Levels to Watch for Nifty

For the recovery to sustain, certain levels will be crucial.

Support Level

• 23,200 (critical level to hold)

Resistance Level

• 23,700

If the index fails to hold above 23,200, selling pressure may re-emerge. Meanwhile, a decisive move above 23,700 would be required to signal a stronger recovery.

Until then, the current move appears to be a short-term relief rally rather than a trend reversal.

Volatility Eases Slightly

Market volatility cooled slightly as the India VIX declined 4.47% to 21.63, indicating a modest easing in nervousness after the recent spike.

Despite the decline, volatility levels remain elevated, suggesting wider price swings may continue in the near term.

Bank Nifty Stages Recovery From Oversold Levels

The Nifty Bank also witnessed a rebound, closing at 54,413.40, up 655.55 points (+1.22%) after recovering from lower levels following the recent sharp sell-off.

During the session, the index briefly slipped below the 53,483 swing low recorded on 9 May 2025, signaling continuation of the prevailing weakness before recovering later in the day.

Piercing Pattern Signals Short-Term Pullback

On the daily chart, Bank Nifty formed a piercing candlestick pattern, which often indicates a short-term bounce after a strong decline.

Momentum indicators still highlight weakness:

• RSI is near 28, showing the index remains in oversold territory.
• The DMI setup continues to indicate a negative trend structure.

Key Levels for Bank Nifty

Support Zone

• 53,400 – 53,500

Resistance Zone

• 55,000 – 55,500

As long as the index holds above the 53,400–53,500 zone, some stabilisation or a short-term recovery may continue. However, strong resistance near 55,000–55,500 may cap the upside.

Market Outlook

Both Nifty and Bank Nifty are witnessing relief rallies from deeply oversold conditions, but the broader technical structure still remains weak.

Unless key resistance levels are reclaimed, the current rebound is likely to be a short-term bounce within a volatile market environment, rather than the start of a sustained uptrend.