Technical View: Five-day gaining streak helps Nifty bulls clear 50% retracement, could target 25,300; Bank Nifty disappoints

Nifty outlook for August 21

The Nifty 50 sustained its upward journey for the fifth consecutive session, rising a third of a percent on August 20, despite the Bank Nifty lagging behind. The index cleared the crucial 25,000 hurdle, which coincides with the 50 percent Fibonacci retracement (from the June high to the August low)—a positive technical signal. According to experts, if the index sustains above this level, the next target is 25,170 (61.8 percent retracement), followed by key hurdles at 25,250–25,300. On the downside, the 24,850–24,800 zone is expected to act as strong support.

The Nifty 50 gained strength after an initial hour of volatility. It climbed higher as the session progressed, surpassing the 25,000 mark and hitting an intraday high of 25,089, before closing at 25,051—up 70 points. It formed a bullish candle on the daily charts, indicating a continuation of the uptrend. The MACD moved closer to the zero line with a bullish crossover and further strengthening in the histogram, while the RSI rose to 56.99, signalling a healthy trend.

The Nifty is now positioned near a hurdle marked by a down-sloping trendline at around 25,080. The overall bullish chart pattern suggests a strong possibility of a decisive breakout above this level soon, according to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

He noted that any further upside from current levels could take the Nifty toward the next overhead resistance at 25,300 in the short term, while immediate support is placed at 24,900.

Weekly options data suggests that the 25,000–24,900 zone is expected to act as strong support, with resistance seen on the higher side at 25,100–25,200.

In the derivatives segment, maximum Call open interest was seen at the 25,500 strike, followed by the 25,100 and 25,200 strikes. Maximum Call writing was observed at the 25,050 strike, and then at the 25,100–25,250 strikes. On the Put side, the 25,000 strike holds the maximum open interest, followed by the 24,900 and 24,950 strikes, with the highest Put writing at the 25,000 strike, followed by 25,050 and 24,950 strikes.

Bank Nifty

However, the Bank Nifty disappointed on Wednesday, underperforming the benchmark Nifty 50 by declining 167 points to close at 55,698. The banking index formed a small bearish candle with both upper and lower shadows, following a green candle in the previous session—indicating a rangebound action.

Over the last two sessions, the Bank Nifty took support multiple times around the 55,550–55,600 zone. The lack of support from key heavyweights HDFC Bank and ICICI Bank weighed on sentiment.

Additionally, the index failed to close above the previous two days’ highs, underlining its relative underperformance compared to the Nifty and Sensex. With Wednesday’s closing, the index now trades below its key short-term moving averages: the 20-day and 50-day exponential moving averages (DEMA).

Sudeep Shah, Head – Technical Research and Derivatives at SBI Securities, said,
“Key support is placed at 55,600–55,550; a break below this could open doors to 55,400–55,350. However, immediate resistance is seen at 55,950–56,000.”

Meanwhile, the India VIX, the fear index, remained subdued, continuing to trade below short-term moving averages, signalling comfort for bulls. It declined marginally by 0.04 percent to 11.79.

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