Technical View: Nifty 50 must defend 25,800 for rally toward psychological zone; Bank Nifty may extend uptrend if it holds above 60,400

Nifty Outlook for February 10

• Nifty 50 must defend 25,800 for rally toward psychological zone
• Next resistance for Nifty 50 seen at 26,000 mark
• Immediate support is placed at 25,800

Did our AI summary help?

The Nifty 50 decisively scaled above 25,800 after a gap-up opening following the announcement of the India–US interim trade agreement over the weekend, closing with a nearly seven-tenths of a percent rally on February 9 and making a strong start to the week. Sustaining above all key moving averages, positive momentum indicators, and the expansion of Bollinger Bands provided enough strength to the market.

If the benchmark index manages to sustain above 25,800, a rally toward the psychological 26,000 mark cannot be ruled out in the upcoming sessions. Until then, it may consolidate, with immediate support placed at 25,780; below this level, selling pressure could emerge, experts said.

The Nifty 50 opened nearly 200 points higher at 25,889 and remained range-bound on the higher side. The index sustained above 25,800 amid range-bound trading and finished the session at 25,867, up 174 points (0.68 percent), forming a small bearish candle with a long lower shadow on the daily timeframe, indicating buying interest at lower levels.

The opening upside gap of February 3 is still partially open and has now been added to Monday’s up-gap. This is a positive indication and signals the formation of a bullish runaway gap, which is normally formed in the middle of an uptrend.

Hence, according to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, the underlying trend of the Nifty remains positive. “The next upside levels to be watched are around 26,000 and 26,350 in the near term. Immediate support is placed at 25,700,” he said.

The momentum indicators remained positive, with the RSI climbing to 56.2. The MACD gained further strength, moving toward the zero line, while the histogram extended its upward journey.

Weekly options data also suggested the next resistance for the Nifty 50 at the 26,000 mark, with immediate support at 25,800. The maximum Call open interest was seen at the 26,000 strike, followed by the 25,900 and 26,500 strikes, with maximum Call writing at the 26,000, 25,900, and 25,850 strikes. Meanwhile, the 25,800 strike held the maximum Put open interest, followed by the 25,700 and 25,500 strikes, with maximum Put writing at the 25,800, 25,850, and 25,750 strikes.

Meanwhile, the fear gauge India VIX snapped its five-day losing streak and rose 2.09 percent to 21.19 but sustained below the 200-day EMA and short-term moving averages, signalling comfort for bulls.

Bank Nifty

The Bank Nifty also witnessed a gap-up opening and convincingly surpassed its previous record high of 60,437, outperforming the benchmark Nifty 50. The banking index surged 549 points (0.91 percent) to 60,669 and formed a bearish candle on the daily charts near the upper Bollinger Bands. This marked the second bullish gap created by the index in the current month after February 3, while sustaining above the falling support trendline.

All key moving averages trended upward, with a bullish bias in momentum indicators. The RSI maintained a bullish crossover and held above the 60 zone, while the MACD trended higher with further strength in the histogram.

According to Vatsal Bhuva, Technical Analyst at LKP Securities, the overall bullish chart structure remains intact, with the base gradually shifting higher, suggesting accumulation at elevated levels.

“A buy-on-dips strategy can be adopted as long as the index sustains above the crucial 60,000 mark. On the levels front, immediate support is placed near 60,000, while resistance is seen around the 60,900 zone,” he said.