Nifty Stabilises After Recent Correction; Follow-Through Buying Awaited

Market Recap

The Nifty index staged a relief rally, ending the session at 25,175.40, up 0.51%, after successfully defending its previous swing low. The rebound gained traction once the index managed to sustain above the psychological 25,000 mark, offering temporary respite after the recent correction.

Market breadth improved during the session, with the advance–decline ratio turning supportive, signalling broader participation in the recovery attempt rather than a narrow, stock-specific bounce.

Technically, Nifty has moved back above its 200-day moving average, a positive short-term development. However, the index continues to trade below its short- and medium-term moving averages, suggesting that the current move is corrective in nature rather than the start of a fresh uptrend.

Technical View – Nifty

Momentum indicators reflect early stabilisation but stop short of confirming a trend reversal:

• The daily RSI, positioned near the 34–35 zone, is showing initial signs of base formation after remaining in oversold territory.
  
  
• The MACD suggests that downside momentum has eased, though it has yet to generate a clear bullish crossover.
  
  
• India VIX, at 14.45, remains elevated, indicating ongoing uncertainty and the likelihood of heightened intraday volatility.
  

Key Levels to Watch – Nifty

• Support: 24,950–25,000
  Holding above this band keeps the short-term base formation intact.
  
  
• Resistance: 25,300–25,350
  A stronger hurdle is placed near 25,450, coinciding with the short-term moving average.
  

While the current move appears to be relief-driven, further upside traction may emerge only if Nifty sustains decisively above 25,300. Failure to do so could result in renewed consolidation or volatility.

Nifty Bank Outlook

The Nifty Bank index settled at 59,205.45, gaining 1.25%, after witnessing a recovery from recent lows. The index opened on a steady note and gradually built strength through the session, eventually closing above its intraday VWAP, indicating improving intraday sentiment.

On the daily chart, Nifty Bank formed a bullish piercing candlestick near lower levels, highlighting buying interest following the recent decline. However, the index continues to trade below its short- and medium-term moving averages, while the Supertrend remains positioned near 60,000, keeping the broader setup under pressure.

Momentum indicators present a mixed picture:

• The RSI has edged higher toward the 48 zone, signalling mild improvement.
  
  
• The MACD, however, remains below the zero line, indicating that upside momentum has yet to fully revive.
  

Key Levels to Watch – Nifty Bank

• Support: 58,750–58,900
  A breakdown below this band could invite renewed weakness.
  
  
• Resistance: 59,500–59,800
  This zone is expected to cap near-term upside.
  

Market Outlook

Both Nifty and Nifty Bank have shown signs of stabilisation after the recent correction, supported by improved breadth and short-covering. However, the absence of strong follow-through buying and continued trading below key moving averages suggest that the recovery remains fragile.

Sustained strength above 25,300 in Nifty and 59,500 in Nifty Bank will be crucial to signal any meaningful improvement in the short-term outlook. Until such confirmation emerges, the market is likely to remain range-bound and volatile, with traders advised to stay selective and disciplined.