Technical View: Nifty sees biggest single-day rally in 5 months, set for record high; Bank Nifty above 59,500 as VIX below 12

Nifty sees biggest single-day rally since June, outlook for November 27

The Nifty bulls were back in a strong mood and staged a stellar performance on November 26, posting their biggest single-day rally in the last five months and making a solid start to the December series. The broader markets also participated in the rally, while the Bank Nifty closed above 59,500 for the first time as the India VIX fell below the 12 zone, signalling comfort for the bulls.

The Nifty 50 took strong support at the 20-day EMA (25,841) in the opening itself and extended its rally as the day progressed, hitting an intraday high of 26,215. The index recouped all the previous three days’ losses in a single session and moved closer to the previous week's high. It finished at 26,205 — the highest closing level since September 26, 2024 — up 321 points or 1.24 percent, marking the biggest single-day rally since June 20 this year.

Now, the benchmark index is just 72 points away from its record high of 26,277 seen on September 27, 2024. Hence, 26,300 is expected to be the immediate target for the index, and above this, the 26,500 zone is likely to be watched. However, 26,000 is expected to act as a critical support level henceforth, experts said.

It has formed a long bullish candle on the daily timeframe, signalling strong control of the bulls over the market. It traded well above all key moving averages and moved closer to the upper Bollinger Bands.

The RSI turned bullish, rising to 63.21, while the MACD also showed a positive crossover with the histogram climbing above the zero line, indicating an improving trend.

“The long bull candle has almost engulfed the last four sessions’ range on the upside in one session. This is a positive indication and signals that the market is likely to zoom into new all-time highs soon,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

The larger degree positive pattern of higher tops and bottoms remains intact on the daily chart, and Wednesday’s dip to 25,842 could now be considered a new higher bottom of the pattern.

From here, the Nifty could reach 26,300 and then 26,500 in the next few sessions, while immediate support is placed at the 26,050 level, Nagaraj said.

Weekly options data suggests that 26,000 is expected to be strong immediate support for the Nifty 50, with a target of 26,500.

On the Call side, maximum open interest was seen at the 26,500 strike, followed by the 27,000 and 26,200 strikes, with maximum Call writing at the 26,700, 26,500, and 27,000 strikes. On the Put side, the 26,000 strike holds the maximum open interest, followed by the 26,100 and 25,900 strikes, with maximum Put writing at the 26,000, 26,100, and 26,200 strikes.

Along with IT, banking stocks provided strong support to the Nifty 50. The Bank Nifty also recovered all its previous three sessions’ losses and ended at a new closing high of 59,528, up 708 points (1.20 percent), marking the biggest single-day gains since October 1 this year.

The index formed a big bullish candle on the daily timeframe, suggesting that the bulls’ rest period is over and momentum is returning to the upside.

The index reached the upper Bollinger Bands with the RSI at 70.25, showing a positive crossover, further confirming strength in the index. The Stochastic RSI and MACD are on the verge of a bullish crossover, while histogram weakness has almost faded.

Going ahead, a buy-on-dip strategy should be maintained as long as the index sustains above its support levels, advised Vatsal Bhuva, Technical Analyst at LKP Securities.

According to him, immediate support is placed at 59,200, while 58,800 acts as positional support. On the upside, potential resistance is expected near the psychologically important 60,000 level.

Meanwhile, the India VIX, also known as the fear gauge, extended its downtrend for the third consecutive session, falling below short-term moving averages and closing 2.25 percent lower at 11.97, signalling comfort for the bulls.