Technical View: Nifty may consolidate next week as long as it stays below 26,250; Bank Nifty signals caution as VIX spikes 12%

Nifty Outlook for November 24

The Nifty 50 failed to see follow-through buying due to profit booking and closed below the breakout zone of 26,100, falling nearly half a percent on November 21. The spike in the VIX and weakness in the Bank Nifty charts indicated some caution in the short term. Hence, some consolidation may be seen in the upcoming sessions, although the overall momentum remains in favour of the bulls.

The Nifty 50 may face resistance at 26,250 (Thursday's high) going ahead. Until it trades below this level, consolidation may continue, with immediate support at 26,000–25,900, followed by 25,800–25,700 as sacrosanct support. A convincing move above 26,250 could open the door for the 26,500 zone, experts said.

The Nifty 50 opened lower and made multiple attempts to recover from the day’s low but failed each time. Eventually, it finished the day at 26,068, down 124 points (0.47 percent), forming a bearish candle with a long upper shadow on the daily charts, indicating profit-booking pressure near record-high levels.

The RSI still held above the 60 zone (61.95) with a bullish crossover. The Stochastic RSI also maintained a positive crossover, while the MACD remained positive with its histogram sustaining above the zero line.

On the weekly chart, the Nifty formed a reasonable bull candle with a long upper shadow near all-time highs, indicating a bullish outlook for the near term amidst volatility. The index was up 0.61 percent for the week.

According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, the overall near-term trend of the Nifty remains positive, and the present short-term weakness could form a new higher bottom around the 26,000–25,900 levels in the next few sessions.

He expects a bounce from near the support zone by next week. Immediate overhead resistance is seen around 26,250–26,300, he said.

Monthly options data indicated that the Nifty 50 may trade in the 26,000–26,200 range in the near term, with a broader range of 25,700–26,500.

The 26,500 strike holds the maximum Call open interest, followed by the 26,000 and 26,100 strikes, with maximum Call writing at the 26,200, 26,100 and 26,150 strikes. The maximum Put open interest is placed at the 26,000 strike, followed by the 25,900 and 25,700 strikes, with maximum Put writing at the 25,700, 26,500 and 25,750 strikes.

Bank Nifty

The Bank Nifty also witnessed profit-booking pressure, falling 480 points (0.81 percent) to 58,868 and forming a bearish candle after a Spinning Top–type pattern in the previous session, which signalled consolidation and caution for the upcoming sessions. The index traded well above all key moving averages, but the RSI at 63.68 and the Stochastic RSI showed a negative crossover.

On the hourly timeframe, it slipped below the 20-SMA with a bearish RSI crossover. This setup suggests a possible retracement towards the 20-day EMA near 58,300, which can be considered a buying opportunity with a stop-loss at 58,000, according to Vatsal Bhuva, Technical Analyst at LKP Securities.

For the week, the banking index rose 0.6 percent and delivered a breakout from a 4-week consolidation zone, where 58,550–58,650 acted as a strong resistance area. It formed a bullish candle with a long upper shadow on the daily timeframe, indicating profit booking at record-high levels.

On the indicator front, the ADX has begun inching higher, validating the strength of the ongoing uptrend. At the same time, rising MACD histogram bars indicate strengthening upside momentum, supporting the breakout continuation view.

“The 59,300–59,400 zone is expected to act as a crucial resistance. A sustained move above 59,400 could drive the index towards 60,000,” said Sudeep Shah, Head – Technical Research and Derivatives at SBI Securities.

On the downside, the 58,600–58,500 zone is expected to act as a strong support area for the Bank Nifty, he added.

Meanwhile, the India VIX—the fear index—surged 12.32 percent to 13.63 and climbed above all key moving averages, signalling discomfort for the bulls.

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