Nifty Posts Relief Rally Amid Cooling Market Volatility, Requires Continued Buying Momentum to Reach 25,200

Nifty 50 and Bank Nifty Market Analysis

Nifty 50 Performance

On March 5, the Nifty 50 index snapped a three-day losing streak, rising 1.17% or 285 points to close at 24,766. This move outperformed the banking index and recorded above-average volume amid hopes of de-escalation in the ongoing tensions between the US-Israel and Iran.

The index formed a long bullish candle with upper and lower shadows on the daily timeframe, signaling strength despite intraday volatility. The daily RSI saw a mild recovery, rising to 37.55, while the MACD remained below the signal line with another long bearish bar in the histogram. However, the Stochastic RSI turned bullish near the oversold zone, indicating a potential short-term pullback.

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Technical Analysis

According to Nilesh Jain, VP and Head of Technical and Derivative Research at Centrum Finverse, the index has retraced 23.6% of the entire recent decline, which is placed near the 24,800 level. However, the market is not completely out of the woods yet, and the current move should be considered only a pullback as long as the Nifty trades below the 25,200 level.

Immediate support is placed at 24,600, and a break below this level could drag the index further towards 24,400.

Options Data

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The weekly options data suggested that the Nifty is expected to take support at 24,500 and face resistance at 25,000 in the short term. A decisive and sustainable move on either side could confirm the trend for the Nifty 50.

India VIX

The fear gauge India VIX fell sharply after a three-day spike, declining 15.53% to 17.86, signaling some comfort for bulls. However, a further decline and consistent movement below the 12 zone are necessary for major stability for bulls.

Bank Nifty Performance

The Bank Nifty also managed to stay well above the previous day's low and negated the lower highs–lower lows structure of the previous four consecutive sessions. However, the volume was lower than the previous day.

The index gained 301 points (0.51%) to close at 59,056, which is almost near the 100-day EMA (59,050). However, it underperformed the benchmark Nifty 50 and remains well below its short- and medium-term moving averages.

Technical Analysis

According to Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities, the zone of 59,400–59,500 will act as a key resistance area in the coming sessions. A sustained move above this band could open the door for a meaningful upside extension.

On the downside, the 58,600–58,500 region will serve as a crucial support zone. A decisive break below this level may trigger renewed selling pressure and generate a stronger trending move.