Nifty Extends Rally Hopes Above 23,500, Bank Nifty Faces 54,700 Hurdle Amid Elevated Volatility

Nifty 50 Update: March 25

The Nifty 50 continued its upward trend, rising 1.7% on March 25, and gaining 3.7% from the recent swing low over the last two consecutive sessions. The global risk sentiment is improving, driven by hopes for peace in West Asia and a decline in oil prices below $100 a barrel.

Technical Indicators

Momentum indicators are showing further improvement, with the RSI climbing slightly above 40 with a positive crossover, and the MACD trending upward, though still below the signal and zero lines. The histogram bars indicate a fading of weakness.

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Key Levels

The 23,850 zone, coinciding with the 20-day EMA and the point of reversal of the lower high–lower low formation, remains a crucial resistance level for the Nifty 50. In the immediate term, the 23,500–23,600 zone is expected to act as key resistance, while support is placed around the 23,000 zone.

Market Action

The Nifty 50 opened above the psychological 23,000 mark and remained higher throughout the session, closing at 23,306, up 394 points (1.72%). The index formed a long bullish candle with a minor upper shadow on the daily timeframe, indicating a healthy bias.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Market Outlook

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, believes that the underlying trend of the market continues to be positive. He expects further sustainable upside from here, which could push the Nifty towards the next target of 23,850 in the near term. Any consolidation or dip from here could find support around the 23,000 level.

Options Data

The monthly options data indicates that the Nifty 50 is expected to trade in the 23,000–24,000 range in the short term. The maximum Call open interest was seen at the 24,000 strike, followed by the 23,500 and 23,000 strikes.

India VIX

The fear index India VIX remained in an elevated zone, though it cooled moderately by 0.4% to 24.64. It needs to fall sharply towards the 20–18 levels to bring bulls into a comfort zone.

Bank Nifty

The banking index also witnessed follow-up buying, rising 1,102 points (2.10%) to 53,708 on Wednesday, and gaining 4.6% over the last two sessions from the recent swing low. The index needs to move above 54,700, the next crucial hurdle, followed by 55,600 as the next key resistance. Support is seen at 53,000.

Momentum Indicators

Momentum indicators show a bullish crossover in the RSI along with a positive divergence, supporting the ongoing bounce.