Nifty Rebounds as Volatility Cools, but Resistance Caps Upside

The Nifty 50 extended its recovery for the second straight session, closing at 23,581.15, up 0.74%, as easing volatility supported a short-term bounce after the recent sharp decline.

Recovery Continues, But Trend Still Weak

On the daily chart, Nifty formed a bullish candlestick, indicating continuation of the ongoing pullback. However, the broader trend remains under pressure, as the index is still trading below its key moving averages.

The index is currently hovering near the 0.236 Fibonacci retracement level (~23,750), which is acting as an immediate resistance zone.

This suggests that:

• The current move is a recovery within a downtrend
• A confirmed trend reversal is still not in place

Momentum Shows Early Improvement

• RSI (Relative Strength Index) has improved from deeply oversold levels and is now near 33, indicating early signs of momentum recovery
• On the hourly chart, a bullish divergence supported the recent rebound

Meanwhile, volatility has cooled significantly:

• The India VIX declined 8.39% to 19.79, indicating reduced market fear and supporting the short-term upside

Key Levels to Watch for Nifty

Resistance Zone

• 23,700 (critical breakout level)
• 23,900 – 24,000 (next upside targets)

Support Level

• 23,200

A sustained move above 23,700 is crucial for extending the recovery. Failure to break this level may keep the index range-bound or under pressure. On the downside, a break below 23,200 could resume the broader downtrend.

Bank Nifty Shows Mild Recovery After Sharp Fall

The Nifty Bank also witnessed a mild rebound, closing at 54,876, up 0.85%, following the recent correction.

Short-Term Pullback, Not Trend Reversal

• The index formed a bullish candle after multiple sessions of decline
• However, it continues to trade well below its short-term moving averages, indicating underlying weakness

Momentum indicators:

• RSI near 31, showing a slight improvement but still in the lower range
• Indicates limited strength despite the bounce

Both Nifty Private Bank and Nifty PSU Bank indices showed marginal gains, suggesting that short-term recovery may continue, but with caution.

Key Levels for Bank Nifty

Support Level

• 54,200

Resistance Zone

• 55,500 – 56,000

Sustaining above 54,200 is important to keep the recovery intact. A move toward 55,500–56,000 is possible if momentum improves, but the broader trend still favors caution.

Market Outlook

The market is currently witnessing a relief rally supported by cooling volatility, but:

• Key resistance levels are still capping the upside
• Trend structure remains weak
• Volatility may return if resistance holds

Until major resistance levels are reclaimed, the move is likely to remain a short-term pullback within a broader declining trend.