Technical View: Consolidation breakout takes Nifty above 25,000 after 7 months; next target seen at 25,300

Nifty Upward Journey

Bulls staged a strong performance in the second half of the session on May 15, the weekly F&O expiry session, driving the benchmark Nifty 50 index above 25,000 for the first time in the last seven months. This surge was attributed to improved global sentiment, rising hopes of another rate cut by the RBI in the upcoming June policy meeting, and consistently falling inflation. Technical indicators turned further positive, with the formation of higher highs and higher lows, along with all short- and medium-term moving averages (5, 10, 20, and 50-day EMAs) sloping upward.

Hence, according to experts, the Nifty 50 is likely to move toward the next target of 25,300, which is the 78.6 percent Fibonacci retracement level (of 26,277–21,744). Above this, the 25,500–25,700 range will be the next levels to watch. However, support is placed at 24,500, which is the low of Thursday’s candle.

The Nifty 50 remained rangebound in the first half of the session but gained momentum in the second half. The index touched an intraday high of 25,116 before closing 395 points (1.6 percent) higher at 25,062, marking the highest closing level since October 14, 2024.

The index formed a long bullish candle with a lower wick on the daily chart, accompanied by above-average volumes, signaling market strength. Both the RSI and MACD showed a positive crossover.

Back-to-back long bullish candle formations over the last four sessions, with only minor weakness in between, indicate that the bulls are back in control.

According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, the huge opening upside gap of May 12 remains open even after four sessions, and this gap could be considered a bullish breakaway gap.

“The overall trend of Nifty continues to be positive, and the next upside levels to be watched are around 25,250 and 25,500 in the near term. Immediate support is placed at 24,800,” he said.

The weekly options data signaled a 26,000 target for the Nifty 50, with 24,500 as support in the short term. The maximum Call open interest was observed at the 26,000 strike, followed by the 25,500 and 25,000 strikes, with the maximum Call writing at the 26,000 strike, then at 25,100 and 25,500 strikes. The 24,500 strike holds the maximum Put open interest, followed by the 25,000 and 24,600 strikes, with maximum Put writing at the 25,000 strike, then at 24,500 and 24,800 strikes.

Bank Nifty

The Bank Nifty also formed a bullish candle on the daily timeframe, but continues to face 55,500 as a strong hurdle, which has acted as a key resistance level in recent sessions. Breaking above this level appears crucial for a further upside toward the 56,000–56,100 zone. The index rose 554 points (1 percent) to close at 55,356.

“A move above 55,500 could trigger fresh buying and short covering, with an immediate upside target of 56,000, followed by 56,400. On the downside, key support lies at the 4-day range low of 54,550, with immediate support at 55,000,” said Anshul Jain, Head of Research at Lakshmishree Investments.

He advised that traders should watch for a breakout with volume confirmation to initiate long positions, keeping stop losses below 55,000.

Meanwhile, the fear index, India VIX, continued to support the bulls, as it has been falling since the beginning of the current week. On Thursday, it fell 1.93 percent to 16.89, further boosting positive sentiment.