Technical View: Nifty needs to clear 25,900–26,000 hurdle to enter bullish momentum; rangebound trade likely until then

Nifty outlook for January 14

• Nifty continues to face hurdle at 25,900-26,000
• Nifty support placed at 25,700–25,600
• India VIX remains at elevated levels ahead of Union Budget

Did our AI summary help?

The Nifty 50 failed to attract follow-through buying interest and closed lower with above-average volumes on January 13. The index also could not hold above the 50-day EMA (near 25,900), which remains the immediate hurdle. However, it negated the lower high–lower low structure of the previous five consecutive sessions and defended the 100-day EMA for the third straight day, which is a positive sign. Buying interest continued at lower levels for another session, although some profit booking was seen at higher levels.

On the hourly chart, the index entered the momentum zone by rising above the midline of the Bollinger Bands. However, on the daily chart, it remained below the short- and medium-term moving averages, with the 10-day EMA falling below the 20-day EMA and the 20-day SMA.

Momentum indicators continued to signal caution, with the RSI at 41.16 sustaining below its signal line. The MACD maintained a bearish crossover, accompanied by a further decline in the histogram.

The Nifty 50 opened higher and nearly tested the 25,900 level but failed to sustain gains amid volatility. The index turned lower in the afternoon session and remained under pressure for the rest of the day, closing 58 points lower at 25,732. It formed a long bearish candle with a long lower shadow on the daily chart.

This market action indicates the presence of a crucial overhead resistance around the 25,900–26,000 zone. “However, buying has started to emerge near lower support levels. This is a positive signal and hints at the possibility of an eventual breakout in the short term,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

“The formation of a higher-bottom reversal pattern on the intraday (60-minute) chart indicates that the market could move up from here and surpass the hurdle of the 25,900–26,000 levels in the next few sessions. Immediate support is placed at the 25,600 level,” he added.

Weekly options data continued to suggest that the 26,000 level is expected to remain a crucial resistance, with support seen in the range of 25,700–25,600.

The maximum Call open interest was placed at the 26,000 strike, followed by the 25,800 and 26,500 strikes. Maximum Call writing was seen at the 26,000, 25,800, and 25,900 strikes. Meanwhile, the 25,000 strike held the maximum Put open interest, followed by the 25,700 and 25,500 strikes, with maximum Put writing at the 25,000, 25,700, and 25,600 strikes.

Bank Nifty

The Bank Nifty extended its upward journey for the second straight session and closed above the 20-day EMA and 20-day SMA (the midline of the Bollinger Bands). However, it formed a bearish candle with a long lower shadow on the daily chart due to profit booking at higher levels. The index also sustained well above the rising support trendline and the 50-day EMA, which is positive.

The banking index climbed above the resistance zone of 59,700 but failed to sustain those levels. It erased 189 points from the day’s high before closing 128 points, or 0.22 percent, higher at 59,579. The index also negated the lower low of the previous five consecutive sessions.

Momentum indicators are yet to align fully with the improving trend and continue to show mixed signals. The RSI rose to 53.53 but remained below the reference line, while the MACD stayed below the signal line with a further fall in the histogram.

“The 20-day SMA is currently acting as a strong support zone. Immediate support is placed at 59,300, with resistance at 59,800, while positional support lies at 59,000. If the index sustains above the 20-day SMA for the next 2–3 sessions, a move towards 60,200 can be expected,” said Vatsal Bhuva, Technical Analyst at LKP Securities.

Meanwhile, India VIX, also known as the fear gauge, remained at elevated levels despite correcting 1.5 percent to close at 11.20. It continues to signal caution for bulls. The VIX is expected to rise further to the 12–13 range, especially ahead of the Union Budget, experts said.