Technical View: Nifty eyes new swing high if 25,000 holds, Bank Nifty must sustain above 55,700 for rally

Nifty Upward Journey

The Nifty 50 extended its upward momentum for another session on May 26, supported by U.S. President Donald Trump's decision to extend the deadline for imposing 50 percent tariffs on the European Union, as well as a decline in the Dollar Index. The index formed a higher high–higher low pattern, and trading volumes were higher compared to the previous session. Additionally, it tested the long downward-sloping trendline at 25,070—connecting the highs of September 27, 2024, and May 15, 2025—but failed to sustain above this level.

Experts noted that if the index sustains above the 25,000–25,050 zone, a rally toward 25,200–25,300 cannot be ruled out. Beyond that, 25,500 is the next level to watch. On the downside, the immediate support zone is seen at 24,900–24,850.

The Nifty 50 opened above 24,900 and maintained that level throughout the session. It closed at 25,001, up 148 points or 0.60 percent, forming a bullish candlestick pattern with an upper shadow on the daily chart. This indicates a positive trend, although some selling pressure was observed at higher levels.

"A sustainable move above 25,000 could drive the Nifty towards the 25,200–25,250 levels in the short term," said Hrishikesh Yedve, AVP, Technical and Derivatives Research at Asit C. Mehta Investment Intermediates.

On the downside, he added that the 21-day Exponential Moving Average (21-DEMA) provides key support around 24,530. As long as the index holds above this level, a buy-on-dips strategy remains favourable.

Weekly options data indicates that the 25,000 level is crucial for determining the Nifty 50's next direction. Key support is seen at 24,500, while resistance lies at 25,500. The highest Call open interest is concentrated at the 25,000 strike, followed by the 25,500 and 25,800 strikes. Maximum Call writing was observed at the 25,000 level, then at 25,100 and 25,600. On the Put side, the highest open interest is at the 24,500 strike, followed by 25,000 and 24,200, with the maximum Put writing at the 25,000 level, then 25,050 and 24,950.

Bank Nifty

The Bank Nifty also advanced for the second consecutive session, rising 174 points to close at 55,572. However, it failed to sustain above the previous week's swing high of 55,700, a level considered crucial for further upward movement. The index formed a Doji-like candlestick pattern on the daily chart, signaling indecision among bulls and bears.

"A sustained breakout above 55,700 can trigger a rally towards the all-time high of 56,098.6. Momentum indicators on the 75-minute chart support a potential breakout into record territory, suggesting strong underlying bullish momentum in the sessions ahead," said Anshul Jain, Head of Research at Lakshmishree Investments.

However, traders should exercise caution as the India VIX, the fear gauge, climbed above the 18 mark and moved above all key moving averages. The index rose 4.3 percent to 18.02, reflecting increased market volatility.