Technical View: US–India deal clears all hurdles for bulls; Nifty logs biggest single-day rally since May 2025, eyes record high; Bank Nifty hits new peak

Nifty outlook for February 4

• Nifty 50 may face next resistance at 26,000, followed by 26,500
• Nifty support is placed at 25,500
• VIX needs to decisively fall below all key moving averages to provide major comfort for bulls

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The US–India trade deal announcement cleared all hurdles for the Nifty 50 as well as Bank Nifty bulls in a single session on February 3 after a decisive gap-up opening, helping both indices record their biggest single-day rally since May 12, 2025. Further cooling in the VIX and improving momentum indicators also aided the uptrend. While the banking index hit a new high of 61,765, the benchmark Nifty 50 could not reclaim its previous record high of 26,373, which is expected to remain a crucial resistance going forward for any further sharp run. Until then, range-bound trading with key support in the 25,600–25,500 zone can be seen in the upcoming sessions, experts said.

The Nifty 50 opened near its previous record high with a rally of over 1,200 points but could not sustain all those gains till the close due to profit booking as market participants digested the deal news. The index closed at 25,728 (the highest closing level since January 13 this year), up 639 points, or 2.55 percent.

The index formed a big red candle on the daily timeframe due to profit-taking and took support exactly at the 50-day EMA (25,640). It is now trading well above all key moving averages, which is positive.

Momentum indicators also aligned with the rally, as the RSI jumped to 53.72 and the Stochastic RSI showed a positive crossover. The MACD climbed above the signal line but is yet to surpass the zero line, while the histogram showed an uptrend after almost a month.

US President Donald Trump announced a reduction in the tariff rate on Indian goods to 18 percent from 50 percent, which came after a period of more than a year.

The Nifty closed higher by leaving an unfilled gap between the 25,108–25,641 levels (a 533-point unfilled gap). This marks a significant bullish breakout after a few weeks of sharp downward correction, said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

As per gap theory, if the opening gap remains unfilled over the next three to four sessions, it could be considered a bullish breakaway gap, which is normally formed in the middle of a sustained uptrend.

According to him, the underlying trend of the market remains positive. “As long as the Nifty stays above 25,600, there is a higher probability of it heading higher towards the hurdle of 26,000 and then 26,300 in the near term. Immediate support is placed at 25,600,” Nagaraj said.

Weekly options data also indicated that the Nifty 50 may face its next resistance at 26,000, followed by 26,500, where maximum Call open interest is placed, with support at 25,500, where maximum Put open interest was seen.

Meanwhile, the fear gauge, India VIX, dropped further to 12.90, down 7 percent, in addition to an 8 percent decline in the previous session, signalling increased comfort for bulls. However, the VIX needs to decisively fall below all key moving averages to provide major comfort for bulls.

Bank Nifty

The Bank Nifty hit a fresh all-time high of 61,765 intraday, rising over 3,100 points, but failed to close above the upper Bollinger Bands and defend 60,437 (the previous record high). Hence, 60,437 is expected to remain a key hurdle for the banking index going forward, as only sustained trading above this level can open the door for a further rally. Until then, range-bound trade may be seen, with supports at 59,800 and 59,450.

Notably, the index held above the falling support trendline (which had earlier acted as resistance before today’s rally), which is a positive sign. It finished the session at 60,041, up 1,422 points, or 2.43 percent, and formed a long bearish candle, though the big gap between 58,687 and 59,793 remained unfilled.

The RSI has entered a bullish crossover, suggesting improving momentum. “However, Tuesday’s move was largely driven by news- and event-based triggers, making the follow-up session crucial to validate the sustainability of the breakout,” said Vatsal Bhuva, Technical Analyst at LKP Securities.

According to him, if the index holds above its 20-day and 50-day moving averages in the coming sessions, strength can be confirmed. Immediate support is placed at 59,800, while resistance is seen near the 61,700 level.