Technical View: Nifty rebounds after 3-day weakness, next target placed at 24,850, falling VIX turns supportive for bulls

Nifty Trending higher

The Nifty 50 rebounded after a three-day correction, defending the 24,500 mark and closing one-third of a percent higher amid rangebound trading on June 4. The continued decline in India VIX appears to have turned supportive for the bulls. The next hurdle for the index is placed at 24,850—the high of the previous session. Above this, the 25,000 level is the key to watch. However, 24,500 is expected to act as a crucial support zone, according to experts.

After an initial hour of volatility, the Nifty 50 gained strength and maintained an upward bias throughout the remainder of the session. The index hit an intraday high of 24,644 before closing 78 points higher at 24,620. It formed a bullish candle on the daily chart, following the long bearish candle of the previous session, indicating a potential upside bounce in the market.

According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, the underlying trend of the Nifty remains choppy.

“Further upside above the hurdle at 24,850 levels could bring bulls back into action. Immediate support is placed at 24,500 levels,” he said.

Based on weekly options data, the Nifty 50 is expected to trade in the range of 24,500–25,000 in the short term, with 24,600 appearing to be a crucial level for further directional movement.

• Maximum Call open interest is at the 25,500 strike, followed by the 25,000 and 24,600 strikes.

• Maximum Call writing is seen at the 24,600 strike, followed by 24,700 and 24,650 strikes.

• On the Put side, the 24,600 strike holds the maximum open interest, followed by 24,000 and 24,500 strikes.

• Maximum Put writing is noted at the 24,600 strike, followed by 24,500 and 24,000 strikes.

Bank Nifty

The Bank Nifty also closed higher after a day of correction, rising 77 points to 55,677. The banking benchmark index formed a Doji-like candlestick pattern on the daily chart, indicating indecision among bulls and bears ahead of the outcome of the RBI monetary policy.

According to an analyst at Bajaj Broking Research, only a closing above the 56,000 level will indicate an extension of the up move towards the 56,700 zone in the near term. Failure to do so will suggest a continuation of the five-week consolidation trend.

“The short-term structure remains constructive, with immediate support placed at 55,000–55,200 levels, while key short-term support is seen at 54,000–53,500. This coincides with the 50-day EMA, key Fibonacci retracement levels, and the lower end of the established five-week consolidation band,” the analyst said.

Meanwhile, the India VIX, also known as the fear gauge, extended its downtrend for another session, falling 4.89 percent to 15.75 levels—signaling some comfort for the bulls. If the VIX continues to decline and sustains below 15, bulls may enter a more comfortable zone.