Technical View: Market extends weekly gains; VIX-driven comfort boosts bulls. Nifty aims for 26,500 above 20 EMA support, Bank Nifty eyes 60,000

Nifty Outlook for December 1

The Nifty 50 closed a volatile session flat with a negative bias on November 28, snapping its three-day winning streak. However, it extended its winning run for the third consecutive week and ended at a new weekly closing high. The bulls maintained a strong grip on the market, supported by healthy technical and momentum indicators and a continued large-degree higher-high, higher-low formation.

Even the India VIX, also known as the fear gauge, corrected throughout the week after hitting an almost five-month high in the previous week. It fell 1.42 percent on Friday and declined 14.77 percent for the week—the biggest weekly fall since May this year—to 11.62, offering strong comfort to the bulls.

"That said, chasing the index at elevated levels is not advisable, as the risk-reward setup is currently unfavourable. Waiting for a healthy pullback would be a more prudent approach for initiating fresh positions," said Nilesh Jain, Head – Technical and Derivatives Research (Equity Research) at Centrum Broking.

Accordingly, the index is expected to march toward the 26,500–26,600 zone in the short term, provided it holds the crucial support of 25,900 (20-day EMA). Meanwhile, the 25,050–26,000 range is likely to act as immediate support amid possible consolidation.

The Nifty 50 touched an intraday high of 26,281 in the morning after opening higher, but the gains failed to sustain in the afternoon due to profit-booking, which dragged the index down near 25,200. It finished the session at 26,203, down 13 points, after trading within the previous day's range and forming a small bearish candle with upper and lower shadows on the daily charts, indicating consolidation after a strong rally.

The short- and medium-term moving averages trended upward. Momentum indicators and oscillators continued to signal a buy on both daily and weekly timeframes.

According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, the underlying uptrend of the Nifty remains intact.

"The present choppy movement could eventually result in another round of sharp breakout soon in the market. The near-term upside target to be watched is around 26,600, and immediate support is placed at 26,050," he said.

For the week, the index rose 0.52 percent and formed a bullish candle with minor upper and long lower shadows on the weekly charts, indicating volatility but a continuation of the upward trend.

Weekly options data continued to signal 26,000 as an immediate crucial support, while resistance remained at 26,500.

The maximum Call open interest was seen at the 26,500 strike, followed by the 26,300 and 26,400 strikes, with maximum Call writing at the 26,400, 26,300, and 26,500 strikes. On the Put side, the 26,000 strike held the maximum open interest, followed by the 26,100 and 26,200 strikes, with maximum Put writing at the 26,200, 26,100, and 26,150 strikes.

Bank Nifty

The banking index extended its uptrend for the fourth consecutive session, closing flat with a positive bias at 59,753, up 15 points. It hit a fresh record high of 59,897.5 before forming a Doji pattern on the daily charts, signaling indecision after a strong rally. For the week, it gained 1.5 percent—its fourth straight weekly rise—and formed a long bullish candle with a higher-high, higher-low structure for the third consecutive week, indicating underlying strength.

Momentum indicators maintained a bullish bias, while the short- and medium-term moving averages continued to incline upward.

"As long as Bank Nifty holds above 59,400, the ongoing rally could extend toward the 60,000–60,200 mark. Therefore, short-term traders are advised to adopt a buy-near-support and sell-near-resistance approach," said Hrishikesh Yedve, AVP – Technical and Derivative Research at Asit C. Mehta Investment Intermediates.

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