In the previous session, the Nifty 50 rallied nearly 2 percent and registered a decisive breakout from its recent consolidation phase. The index moved above the 50 percent Fibonacci retracement level of the April rally and reclaimed its short-term moving averages, indicating a significant improvement in market structure. The sharp recovery was accompanied by strong participation across sectors, suggesting strengthening bullish sentiment. The broader trend has turned constructive, although follow-up buying will be crucial for sustaining the momentum.
From a technical standpoint, momentum indicators have strengthened considerably. The RSI jumped to 51.25 and witnessed a bullish crossover, reflecting improving momentum after remaining subdued for several sessions. The MACD is on the verge of a positive crossover, while the negative histogram bars have continued to shrink, indicating fading bearish pressure. The immediate resistance is placed at 23,800, followed by the crucial 24,000–24,200 zone. A sustained move above this region may trigger a fresh leg of the uptrend. On the downside, 23,500 is expected to act as immediate support, followed by the stronger support zone around 23,300.
Derivatives data reflects a distinctly positive undertone. The Nifty Put-Call Ratio (PCR) surged to 1.41, its highest level since early January, indicating aggressive put writing activity and strengthening bullish sentiment among option traders. India VIX declined sharply by 5.73 percent to 14.71, marking its lowest closing level since February 27. The sustained decline in volatility signals improving confidence among market participants and provides a supportive backdrop for equities.
Option chain positioning suggests strong support around the 23,500 strike due to significant put writing activity, while immediate resistance is visible near the 23,800 and 24,000 strikes where call writers remain active. A breakout above these resistance levels could result in fresh short covering and further upside momentum.
In terms of price structure, Nifty has confirmed a consolidation breakout after several sessions of range-bound movement. The formation of a strong bullish candle along with a close above key retracement levels indicates accumulation at lower levels and strengthening demand. Follow-through buying in the upcoming sessions would further validate the breakout and improve the probability of an extension toward higher resistance zones.
Bank Nifty significantly outperformed the benchmark index, surging nearly 3 percent and forming a strong bullish candle after a gap-up opening. The index reclaimed its previous swing highs and moved above major long-term moving averages, signalling robust strength. Momentum indicators have also turned decisively positive, with RSI rising to 65.37 and MACD crossing above both the signal and zero lines. Immediate resistance is now placed near the April highs which is 57,456. while support is seen around 55,700–55,500. Sustaining above current levels could pave the way for continuation of the ongoing uptrend.
Overall, the technical setup indicates a strong positive opening with bullish momentum likely to remain dominant. Improvement in market breadth, declining volatility, strengthening momentum indicators, and supportive derivatives positioning favour the bulls. The immediate trading range for Nifty is expected between 23,500 and 24,000, while a decisive breakout above the 24,000–24,200 zone could determine the next directional move toward higher levels,” says Aakash Shah, Technical Research Analyst at Choice Equity Broking Private Limited.