Technical View: Decisive Break Above 200-Day EMA Key for Nifty, Bank Nifty Eyes Higher Levels
The Nifty 50 finally ended its eight-day losing streak on November 19, closing in the green, albeit barely, as it couldn’t sustain above the critical 200-day EMA (Exponential Moving Average) of 23,541. The recovery came amid oversold market conditions, with the RSI (Relative Strength Index) at 30.85 signaling exhaustion in selling pressure. However, lingering geopolitical tensions between Russia and Ukraine kept volatility high.
While the day’s buying momentum offered some relief, the bigger picture remains uncertain. A decisive close above the 200-day EMA is essential for the Nifty to shake off its bearish trend. Until then, the threat of slipping toward the 23,200 level looms large. On the upside, the 23,800 mark remains a significant resistance to overcome.
What Happened on November 19?
After a strong opening at 23,530, the Nifty tested the crucial resistance at 23,800 but couldn’t hold its gains. Profit booking kicked in, erasing 262 points from the day’s high. The index eventually closed at 23,519, up 65 points, forming a Gravestone Doji on the daily chart—a pattern often seen as a warning of bearish sentiment.
Despite this, there were a couple of silver linings:
The Nifty defended the previous day’s low of 23,350.
It broke the lower highs-lower lows sequence from the past four sessions.
According to Rupak De, Senior Technical Analyst at LKP Securities, “The Nifty’s ability to hold above 23,350 hints at a potential bullish reversal. If it sustains above 23,500, we could see a move toward the 23,700–23,800 zone.”
Options Data Insights
The options data points to a short-term range between 23,000 and 24,000:
On the Call side: Maximum open interest is at the 24,000 strike, followed by 24,500 and 23,800.
On the Put side: 23,000 holds the most open interest, with heavy activity also seen at 22,500 and 22,000 strikes.
Interestingly, the 23,700 strike saw significant Put writing, indicating a solid support zone in the short term.
Bank Nifty: A Bright Spot
The Bank Nifty continued to outperform the broader market, holding above its 200-day EMA (49,900) for the fourth consecutive session. It gained 263 points, closing at 50,627, after testing its 10-day EMA at 50,946 during intraday trade. However, a Doji-like candlestick formed, reflecting indecision among market participants.
Momentum indicators like the RSI and MACD remain in sell mode, signaling caution. Despite this, Hrishikesh Yedve, AVP of Technical and Derivatives Research at Asit C Mehta, remarked, “If the Bank Nifty holds above 50,600, we might see further gains toward 51,000–51,500. On the downside, the 200-day EMA should act as a safety net.”
Market Sentiment and Volatility
India VIX, often called the fear gauge, spiked by 3.26% to 15.66, highlighting rising uncertainty. This increase in volatility is a reminder for traders to tread carefully.
What to Watch for Next
For Nifty: 23,350 is the key support level, while 23,800 serves as a tough resistance.
For Bank Nifty: A close above 50,600 could push the index toward 51,500.
Broad Market: Watch for external triggers, such as geopolitical developments, which could sway sentiment.
Markets will remain closed on November 20 due to the Maharashtra assembly elections, offering participants a brief pause to assess their strategies.
Example: Think of Nifty’s struggle with the 200-day EMA like a marathon runner trying to break through “the wall.” It’s close, but without a final burst of energy (or volume and momentum in this case), the finish line (a bullish breakout) remains out of reach. Similarly, Bank Nifty is like a sprinter who’s ahead but cautious about not losing steam at critical hurdles.
