Technical View: Nifty trades above 50-DEMA after rising for 5th day but resistance trendline breakout crucial for further rally

Nifty Outlook for September 10

The benchmark Nifty 50 reclaimed its 50-day EMA (near 24,800) after rising for the fifth consecutive session on September 9, the weekly F&O expiry day. With this move, the index is now trading above all key moving averages as well as the midline of the Bollinger Bands, which, along with healthy momentum indicators, signals a positive trend.

Now, the index needs to clear the falling resistance trendline breakout (around 24,950–25,000) — a level that, if breached, could boost market participants' confidence. Sustaining above this level would also negate the lower high–lower low structure. However, for this to unfold, 24,700 must act as a strong support in the upcoming sessions, according to experts.

On September 9, the Nifty 50 opened above 24,800 (the 50-day EMA) and retained that level throughout the session, ultimately closing 95 points higher at 24,869. It formed a Doji-like candlestick pattern on the daily timeframe, indicating indecision among bulls and bears.

Momentum indicators remained healthy. The RSI stayed above the 50 mark, reaching 53.55 with a bullish crossover, Stochastic RSI also maintained a positive crossover, and MACD remained positive, with further strength in the histogram.

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

“Nifty is apparently creating a base for a decisive upside breakout of the important resistance zone around 24,900–25,000 levels (down-sloping trendline and recent weekly highs). Immediate support is placed at 24,750,” he said.

Weekly Options Data

Weekly options data indicates that 25,000 is expected to be a key resistance zone for the Nifty 50, with support at 24,800.

Maximum Call Open Interest (OI) was seen at the 25,000 strike, followed by 25,500 and 24,900 strikes. Maximum Call writing was observed at the 24,900, 25,000, and 25,500 strikes.

On the Put side, the 24,800 strike holds the maximum Put OI, followed by 24,500 and 24,900 strikes. Maximum Put writing was noted at the 24,800, 24,900, and 24,500 strikes.

Bank Nifty

The Bank Nifty rose 29 points to close at 54,216, trading within the previous day's range. It continued its upward journey for the fifth consecutive session, forming a bearish candlestick with a lower shadow on the daily timeframe. This signals buying interest at lower levels, but also a lack of strength for further upside.

Despite the gains, the index continues to trade comfortably below its 20-day, 50-day, and 100-day exponential moving averages, indicating sustained weakness. The daily RSI remains in the bearish zone, according to RSI range shift rules, suggesting that downside risks remain elevated unless a strong reversal emerges.

According to Sudeep Shah, Head – Technical Research and Derivatives at SBI Securities, the zone of 54,400–54,500 will act as an immediate hurdle for the index.

“On the downside, the zone of 53,800–53,700 will act as a crucial support for the index. If the index slips below the 53,700 level, then the next crucial support is placed at 53,200,” he said.

India VIX

Meanwhile, the India VIX, the volatility or "fear index," sustained near lower zones and remained below all key moving averages, which provides comfort to bulls. However, this also signals the possibility of a sharp move in either direction. The index was down 1.41 percent, closing at 10.69.

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