Technical View: Nifty rallies for 3rd straight week; 25,150 seen as key support for upside towards 25,500

Nifty Outlook for September 22

The Nifty 50 snapped a three-day winning streak and fell 0.4 percent on September 19, closing above the 25,300 mark. However, on a weekly basis, the index extended its rally for the third consecutive week, forming a series of higher highs and higher lows. It gained 0.85 percent for the week, indicating that the overall trend remains strong.

Going forward, some minor consolidation is possible, given the sharp run-up in recent sessions. The 25,150 level—where the index invalidated its previous lower high–lower low structure—is expected to act as a key support zone in the upcoming F&O expiry week. Holding above this level could pave the way for a move toward the 25,500 mark, a key hurdle where a trendline breakout may occur, potentially starting a new leg of the uptrend, according to experts.

On September 19, the Nifty 50 opened moderately lower at 25,410 and traded within a narrow range of 25,290–25,350 for most of the session, eventually closing at 25,327, down 97 points. The index formed a bearish candle on the daily chart, accompanied by above-average volumes, following a Bearish Hanging Man-type pattern in the previous session. This suggests a short-term top reversal pattern, although the index still held well above all key moving averages—signaling a healthy trend.

Technically, the MACD remained in an uptrend with a strong positive crossover, and the histogram stayed above the zero line. The RSI tilted downward but continued to hold above the 60 mark, at 63.71, with a positive crossover.

Despite Friday’s consolidation, “the larger degree bullish pattern of higher tops and bottoms is intact on the daily chart. Further weakness from here could lead to the formation of a new higher bottom within the pattern,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

On the weekly chart, the Nifty formed a long bull candle for the third consecutive week.

According to Shetti, the near-term uptrend remains intact. He advised that further consolidation or minor dips could offer buying opportunities in the coming week.

“Immediate support is placed at 25,150, and a sustainable move above 25,500 could push the Nifty towards the next hurdle at 25,700,” he added.

Weekly options data suggested that the 25,400–25,500 zone may act as a key resistance in the near term, with support likely at the 25,250–25,200 zone.

In the options market, the maximum Call open interest was seen at the 25,400 strike, followed by 26,000 and 25,500. Maximum Call writing was observed at the 25,400, 26,000, and 25,350 strikes.

On the Put side, maximum open interest was at the 25,300 strike, followed by 25,000 and 25,200. Maximum Put writing was seen at the 25,300, 25,250, and 25,350 strikes.

Bank Nifty

The Bank Nifty turned negative for the first time in 13 sessions, declining 269 points to close at 55,459 and forming a bearish candle on the daily timeframe—an expected outcome after the strong rally. While the index may continue in a sideways or consolidation phase for a few more sessions, the broader trend remains favourable for bulls, as it continues to trade well above all key moving averages.

For the week, the Bank Nifty rose 1.2 percent, extending its upward journey for the third consecutive week.

Overall, the structure points to a cautious market with a bearish-to-neutral undertone, favouring sideways movement or a minor pullback, according to Sudeep Shah, Head – Technical Research and Derivatives at SBI Securities.

Regarding key levels, Shah said the 55,600–55,700 zone will act as immediate resistance. A sustained move above 55,700 could lead to continued upside toward 56,000.

However, the 55,200–55,100 zone is likely to provide support, and any throwback toward this area could offer buying opportunities on dips, he added.

Volatility Index

Meanwhile, the India VIX, the fear gauge, rebounded by 0.83 percent to 9.97 but remained at lower levels, indicating continued comfort for bulls.

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