Technical View: Rangebound trading likely to persist until Nifty stays in 24,450-25,000 zone; VIX signals caution for bulls

Nifty Rangebound

Equity benchmark Nifty 50 snapped a two-day winning streak on May 27, ending 0.7 percent lower due to profit booking, which erased the previous day's gains. The index tested a downward-sloping resistance trendline (above 25,050) for another session but failed to sustain higher levels amid continued rangebound trading.

Experts believe that unless the index decisively closes above the 25,000–25,050 zone, the current sideways movement is likely to persist. Immediate support is seen at 24,700, followed by a key level at 24,450. A break above 25,000-25,050 could open the doors for a move toward the 25,200 zone.

The Nifty 50 opened lower at 24,957 and moved within a range of 25,063 to 24,704 before settling at 24,826, down 175 points. The index formed a bearish candle with both upper and lower shadows on the daily chart, indicating indecisiveness and consolidation.

Technically, “24,700 would be the key support zone for traders, while 25,000 would act as a crucial resistance zone for the bulls,” said Shrikant Chouhan, Head of Equity Research at Kotak Securities.

He added, “As long as the market trades within this range, a rangebound texture is likely to persist. On the higher side, a successful breach of 25,000 could push the market up to 25,100–25,250. On the downside, a fall below 24,700 could lead to a retest of 24,500–24,450 levels.”

Monthly options data also indicated resistance around the 25,000 mark, with support near the 24,500 zone. The highest Call open interest was observed at the 25,000 strike, followed by the 25,500 and 25,800 strikes. Significant Call writing was seen at the 24,800, 24,900, and 25,500 strikes. On the Put side, the maximum open interest stood at the 24,000 strike, followed by 24,500 and 24,200. Notable Put writing was recorded at 24,200, 24,800, and 24,400 strikes.

Bank Nifty

The Bank Nifty also came under pressure after a two-day rally, falling 219 points to close at 55,353. It formed a small bearish candle with long upper and lower shadows, resembling a high-wave pattern (though not a classical one) on the daily chart, indicating indecision between bulls and bears.

“On the upside, the index is facing resistance near the 56,000–56,100 levels. On the downside, support is placed near the 21-day exponential moving average (DEMA) at 54,776. As long as the index remains above this level, it could attempt a relief rally,” said Hrishikesh Yedve, AVP – Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates.

Meanwhile, the consistently elevated India VIX, the volatility index, signaled caution for the bulls. It rose by 2.86 percent to 18.54, marking its highest closing level since May 9.