Technical View: Bulls stage sharp comeback; Nifty may target 25,116 if 24,850 holds

Nifty Uptrend

Bulls appeared to make a sharp comeback in the market on May 23 after recent profit booking sessions, pushing the Nifty 50 to the crucial resistance level of 24,850 with notable gains. During the week, the index took support at 24,462, near the 20-day exponential moving average (EMA). It also reclaimed ground above the 5-day and 10-day EMAs, while the Relative Strength Index (RSI) edged higher toward the 60 mark. However, the fear index remained elevated at the 17 level.

The Nifty 50 opened higher at 24,640 and maintained its upward trajectory throughout the day, hitting an intraday high of 24,909. The index closed at 24,853, up 243 points or 0.99 percent, forming a long bullish candlestick pattern on the daily charts.

Technically, this market action signals the formation of a near-term higher bottom for the Nifty following a minor downward correction. The bullish trend of higher tops and bottoms remains intact on the daily timeframe chart.

However, on a weekly basis, the Nifty declined by 0.67 percent, forming a bearish candle with a long lower shadow on the weekly chart—an indication of buying on dips.

“Nifty, having formed a higher bottom at 24,462 on May 22, may witness further upward movement toward the next resistance zone of around 25,100–25,200 levels in the coming week. Immediate support is seen at 24,615,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

Monthly options data suggests that the Nifty 50 may face resistance near the 25,000 level in the near term, with support around 24,500. The highest Call open interest was seen at the 25,000 strike, followed by 25,500 and 25,800 strikes. Maximum Call writing occurred at the 25,800 strike, followed by 24,900 and 25,300 strikes.

On the Put side, the 24,000 strike held the maximum open interest, followed by 24,500 and 24,800. Maximum Put writing was observed at the 24,800 strike, followed by 24,900 and 24,500 strikes.

Bank Nifty

The Bank Nifty also formed a bullish candlestick on the daily chart, rising 457 points or 0.83 percent to close at 55,398 on Friday, reclaiming levels above the 10-day EMA. For the week, the index added 43 points and formed a Doji-like candlestick pattern, indicating indecision among market participants.

“Support is placed at the higher bottom of 54,575. As long as the index trades above this level, the bullish momentum is likely to continue. On the upside, 55,700–56,100–56,500 will act as key resistance zones,” said Amol Athawale, VP – Technical Research at Kotak Securities. However, he cautioned that the uptrend may become vulnerable if the index falls below 54,575.

Meanwhile, the fear gauge, India VIX, remained elevated throughout the week, staying consistently above the 17 mark. It ended the week up 0.12 percent at 17.28 and gained 4.4 percent overall during the week.