Technical View: Nifty could hit 25,000 as long as it stays above 24,500, VIX drops for third session

NIfty Technical View

The Nifty 50 rebounded after a day of profit booking and remained within Monday's broad range, closing four-tenths of a percent higher on May 14. The index stayed well above all key moving averages (5, 10, 20, 50, and 200-day EMAs), and the short-to-medium term moving averages continued to trend upward. A positive crossover in the MACD and Stochastic RSI signaled strength in the market. Hence, according to experts, the index is gradually expected to move toward 25,000, and sustaining above this level could open the door to the 25,200–25,300 zone. However, 24,500 remains the immediate support.

The Nifty 50 opened higher at 24,614 and stayed in positive terrain for most of the session. It closed at 24,667, up 89 points, and formed a small bullish candlestick pattern with upper and lower shadows on the daily charts.

Technically, this pattern indicates a consolidation-type movement in the market at higher levels. "Nifty is finding support around 24,500, which is a support level as per change in polarity. Another support—the 10-day EMA (24,430)—is also intact, and Nifty has been taking support from this moving average over the past couple of weeks," said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

According to him, the near-term trend of the Nifty remains positive. "Having surged higher recently, the market is pausing at the support levels before showing further upward movement. Nifty is expected to advance toward the high of 25,000 levels in the next one week," he added.

The 25,000 strike holds the maximum Call open interest, followed by the 25,500 and 24,700 strikes. The highest Call writing is observed at the 25,500 strike, followed by the 25,000 and 24,700 strikes. On the Put side, the 24,000 strike holds the maximum Put open interest, followed by the 24,500 and 24,600 strikes. The highest Put writing is seen at the 24,000 strike, followed by the 24,500 and 24,400 strikes.

The above weekly options data still indicates that the Nifty 50 is expected to find key support at 24,000 and face key resistance around the 25,000 zone.

Bank Nifty

The benchmark banking index fell below Monday's low (54,558) during the day but managed to defend this level on a closing basis, ending at 54,801, down 140 points, and forming a bearish candlestick pattern with upper and lower wicks on the daily charts—indicating a rangebound session.

Bank Nifty logged its second consecutive down day but showed signs of buying near the 10-day EMA, suggesting a potential bullish rejection. However, the close below 54,900 leans slightly bearish, keeping the index in a cautious zone, said Anshul Jain, Head of Research at Lakshmishree Investments.

For fresh long trades, according to him, a clear breach above 55,100 is needed as confirmation. On the downside, the 10-day EMA at 54,633 to today’s low of 54,491 forms a strong support zone—dips into this area are likely to attract buying interest, he added.

Meanwhile, the India VIX, the volatility index, extended its downtrend for a third consecutive session, which gradually seems to be turning favourable for bulls. It was down by 5.36 percent, closing at 17.23 levels.

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