Technical View: Strong comeback of bulls from support, Nifty eyes October high; Bank Nifty at new closing high

Nifty outlook for November 17

The Nifty 50 not only defended the 25,700 support but also climbed above 25,900 on a closing basis, with moderate gains amid volatility on November 14, following a sweeping win for the NDA in the Bihar election results. The recovery in later trade helped the index close above 25,900.

If the index sustains above this level in the upcoming sessions, the psychological 26,000 is the immediate level to watch, followed by 26,100 (the October high), which is a crucial hurdle zone. However, the 25,750-25,700 range is expected to act as support, according to experts.

Overall, the trend remains in favour of the bulls, with the index trading well above all key moving averages, and the short-term moving averages (10 and 20-day EMAs) trending upward. The RSI, rising to 62.24, and the Stochastic RSI maintained a bullish crossover, while the histogram weakness faded further, with the MACD moving upward toward the reference line.

The Nifty 50 opened lower at 25,768 and turned volatile before gaining strength in the last hour of trade. The index finished at 25,910, up 31 points, and formed a long bullish candle on the daily charts with above-average volumes, indicating a strong comeback of bulls from near the support, though it negated the higher high formation of the previous four straight sessions.

On the weekly chart, the index formed a long bullish candle after three weeks of volatility, rising 1.64 percent. The weekly pattern signals the formation of a 'rising three method' type of formation, which is an uptrend continuation pattern.

According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, the market action indicates the formation of a higher bottom at the 25,740 level, and the underlying trend of the Nifty continues to be positive.

"The overall positive chart pattern signals more upside for the market ahead after a recent downward correction. The next upside to be watched is around the 26,200-26,300 levels. Immediate support is placed at 25,750," he said.

The weekly options data also indicated 26,000 as the immediate hurdle for the Nifty 50, with the 25,800-25,700 range as support.

The 26,000 strike holds the maximum Call open interest, followed by the 26,500 and 26,100 strikes, with the maximum Call writing at the 26,000, 25,800, and 26,100 strikes. Meanwhile, the maximum Put open interest was seen at the 25,500 strike, followed by the 25,800 and 25,700 strikes, with the maximum Put writing at the 25,700, 25,750, and 25,600 strikes.

The Bank Nifty continued to trade higher for the sixth consecutive session, rising 136 points to end at new closing high of 58,518 and forming a long bullish candle on the daily timeframe.

The banking index traded well above all key moving averages, while the RSI at 67.08 entered the bullish zone and the Stochastic RSI sustained a positive crossover. The weakness in the MACD histogram continued to fade. All of this indicated healthy momentum in the index.

For the week, the index rallied 1.11 percent after flat trades in the previous three weeks, forming a long bullish candle with minor upper and lower shadows on the daily timeframe, signaling a positive mood.

Looking at key levels, "the 58,700–58,800 zone is expected to act as a crucial resistance. A sustained move above 58,800 could drive the index toward 59,500," said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.

On the downside, the 57,800-57,700 zone is expected to act as a strong support, which also coincides with the 20-day EMA for the index, he added.

Meanwhile, the India VIX, the fear gauge, dropped below the 12 zone to 11.94, down 1.85 percent, providing comfort for the bulls.