Technical View: Nifty could see healthy upside on decisive break above 25,300; consolidation likely until then

Nifty Outlook for July 17

The Nifty 50 struggled at its 20-day EMA (25,250) for another session and closed moderately higher on July 16, continuing its uptrend and forming a higher low for the second consecutive day.

A decisive and sustained close above the 20-day EMA and the midline of the Bollinger Bands, i.e., the 25,250–25,300 zone, is seen as crucial for the index to advance toward 25,500, according to experts. Until then, consolidation and rangebound trading may persist, with support seen at 25,100–25,000.

After opening flat, the Nifty 50 remained in a rangebound and consolidative phase. The index gained strength in the final hours of trade, hitting an intraday high of 25,255 before closing at 25,212, up 16 points, forming a small bullish candle with minor upper and long lower shadows. This pattern resembles a Doji-like candlestick, suggesting indecision among market participants at lower levels.

On the momentum front, the RSI stood at 51.05, indicating sideways action. The Stochastic RSI showed a positive crossover in the oversold zone. MACD continued with a negative crossover, but the histogram reflected some improvement.

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, said the short-term trend remains positive.

“A sustainable move above the immediate hurdle of 25,250 could pull Nifty towards the next hurdle at 25,550 in the near term. Immediate support is placed at 25,000,” he noted.

According to weekly options data, the Nifty 50 is likely to trade in the 25,000–25,500 range in the short term, with a decisive move on either side likely to determine the next directional trend.

The maximum Call open interest was seen at the 25,500 strike, followed by the 25,300 and 25,200 strikes, with the maximum Call writing at the 25,250 strike, followed by the 25,800 and 25,300 strikes, while the 25,200 strike holds the maximum Put open interest, followed by the 25,000 and 25,100 strikes, with the maximum Put writing at the 25,150 strike, followed by the 25,200 and 25,100 strikes.

Bank Nifty

The Bank Nifty extended its northward journey for the third straight session, forming higher highs and higher lows for the second day in a row. The index rose 162 points to close at 57,169, forming a small bullish candle with both upper and lower shadows — a pattern resembling a high wave, signaling volatility.

A key positive development was the Bank Nifty-to-Nifty ratio chart climbing to a 52-day high, indicating sustained relative strength in the banking space. The index is trading comfortably above short-term moving averages and the midline of the Bollinger Bands, reaffirming its bullish undertone.

Momentum indicators support the view with daily RSI rising to 58.76, approaching a positive crossover, which is encouraging for momentum traders.

Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities, said the Bank Nifty appears poised to extend its uptrend, offering crucial support to the broader market.

“A sustainable move above 57,500 could trigger a sharp rally toward 58,100, followed by 58,600 in the short term. On the downside, the 56,900–56,800 zone is expected to provide support in case of any immediate decline,” he said.

Meanwhile, the India VIX, a measure of market volatility, fell for another session, hitting a fresh 15-month low, which adds to market stability. It dropped 2.09% to close at 11.24, the lowest since April 26, 2024.