Technical View: Bulls Gear Up for a Rally in Nifty, Key Resistance at 24,350
The Nifty 50 index started the December series on a strong note, gaining nearly 1% on November 29 after a sharp decline in the previous session. This bounce-back, marked by a bullish rebound from the 23,900 support level, signals a strong counterattack by the bulls. As the index moved higher to close at 24,131, experts suggest a potential rally toward 24,350, a crucial resistance level. If this hurdle is breached, the next target could extend to 25,000 in the coming sessions.
Daily Chart Analysis
The Nifty opened at 23,927 (its intraday low) and stayed in positive territory, hitting an intraday high of 24,188 before closing at 24,131, up 217 points or 0.91%. The formation of a Bullish Marubozu Opening candlestick pattern and a Bullish Harami candlestick pattern on the daily charts reinforces the positive momentum.
Additionally, the index has climbed above its short-term moving averages (10- and 20-day EMAs) and is now trading near the upper Bollinger Band, indicating further upside potential.
According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, “The Nifty is well-positioned to challenge the immediate resistance of 24,350 and could advance further by next week.” Immediate support is pegged at 23,925, while the key support zone remains at 23,900.
Weekly Chart Analysis
On the weekly timeframe, the Nifty registered a 0.94% gain and formed a candlestick pattern with a long lower shadow, signaling buying interest at lower levels. The options data further suggests that the index may trade within the 24,000-25,000 range for the December series.
Resistance Levels: 24,300, 24,500
Support Levels: 24,000, 23,800
Options Data Highlights:
Maximum Call OI: 25,000 strike
Maximum Put OI: 24,000 strike
Key Call Writing: 25,000, 24,700
Key Put Writing: 24,000, 23,800
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Bank Nifty Technical Outlook
The Bank Nifty closed higher at 52,056, up 149 points, but lagged behind the Nifty amid intraday volatility. Despite trading above all key moving averages, the index failed to stay above the 50% Fibonacci retracement level (from the September high to November low).
A small-bodied bullish candlestick pattern with a minor upper shadow and a long lower shadow was seen on the daily charts, while the weekly chart formed a Doji pattern, reflecting indecision among market participants.
Chandan Taparia, Senior Vice President at Motilal Oswal Financial Services, notes that 52,000 is the critical level to watch. Sustaining above this could lead to a move toward 52,500 and 52,750. However, failure to hold 52,000 may result in a pullback to 51,750-51,500.
Volatility Index Update
The sharp drop in India VIX (down 5.13% to 14.42) provides some relief to the bulls, as reduced volatility often supports a steady uptrend.
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Stay tuned to Trading Thought for real-time updates on market trends, insights, and trading strategies. Keep an eye on the resistance and support zones while planning your trades in this pivotal week for both Nifty and Bank Nifty.