Technical View: Nifty faces sell-on-rise again at higher levels, crossing 23,250 crucial for upward journey

Nifty Technical View

The Nifty 50, as expected, rebounded to near 23,250 intraday, but the sell-on-rise strategy remained at the forefront, which resulted in wiping out all those gains and closing flat with a negative bias. The index continued its downtrend for the seventh consecutive session amid volatility. As long as the index stays below 23,250, consolidation is likely to continue in the upcoming sessions, with crucial support at 22,800, experts said.

The Nifty 50 opened slightly higher at 23,056 and climbed up to 23,236 intraday. However, it gradually erased those gains in the afternoon and finally finished at 23,031, down 14 points. The index formed a small-bodied bearish candlestick pattern with a long upper shadow on the daily charts, indicating a lack of strength in the upside bounce of the market.

According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, the short-term trend of the Nifty remains positive, but the market is lacking the strength to surpass immediate hurdles.

"A decisive move above 23,250 levels could confirm a near-term bottom reversal pattern in the market. Immediate support is placed at 22,800 levels," he said.

The weekly options data indicated that the Nifty 50 may remain in the range of 22,500-24,000, with an immediate hurdle at 23,200-23,400 on the higher side.

On the Call side, the 24,000 strike remained at the top, holding the maximum open interest, followed by the 23,500 and 23,400 strikes, with the maximum Call writing at the 24,000 strike, and then the 23,400 and 23,200 strikes. On the Put side, the maximum open interest was seen at the 22,000 strike, followed by the 22,400 and 22,500 strikes, with the maximum Put writing at the 22,000 strike, and then the 22,400 and 22,200 strikes.

Bank Nifty

The Bank Nifty made an attempt to bounce back above short-term moving averages (10 and 20-day EMAs) but failed to sustain those levels and closed 120 points lower at 49,360. The banking index formed a small bearish candlestick pattern with a long upper shadow on the daily timeframe, indicating a lack of strength at higher levels but continued to defend the 49,250 level (the 50% Fibonacci retracement of the recent upward journey—from 47,844 to 50,642) for the third consecutive session.

On the upside, the 49,600–49,700 zone presents a major hurdle, where profit booking is advised, said Anshul Jain, Head of Research at Lakshmishree Investments.

According to him, a decisive break above this resistance could fuel further upside, but failure may lead to consolidation. Traders should stay cautious, buying near supports and exiting near resistance levels for optimal risk management, he advised.

The India VIX, the fear factor, moved in a large range from 12.20 to 15.47, before closing at 14.96, up 0.40 percent, which is still unfavourable for bulls.