Nifty Inches Towards 24,600: Technical Bounce Gains Momentum as VIX Hits Five-Month Low
The Nifty 50 extended its upward trend for the third consecutive session on July 3, gaining 95 points or 0.39 percent. The index closed at 24,271, settling marginally above the previous week's high after trading in a range. Despite some profit booking late in the session, the index sustained its crucial position above the 24,300 mark.Nifty Technical Strength and Momentum Indicators
Technically, the market displayed mixed signals, forming a bearish candle on the daily charts while simultaneously sustaining the bullish gap. The momentum indicators, however, showed substantial improvement. The Relative Strength Index (RSI) climbed to 60.95 with a strong crossover, indicating a gradual rise in bullish conviction. Furthermore, the DI+ crossed above the DI- on the ADX indicator, suggesting bulls are gaining ground over bears.The Nifty remains comfortably above its 100-day Exponential Moving Average (EMA) of 24,130 and has maintained strength above the falling resistance trendline at 24,200. Looking at the weekly chart, the index gained 215 points or 0.89 percent. The formation of a long bullish candle on the weekly chart suggests that the market consolidation phase is likely to conclude soon.
Key Resistance and Support Levels for Nifty 50
Market experts point towards significant hurdles ahead while identifying immediate support zones. Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, stated that the immediate upside target next week is around 24,600. Immediate downside support has been placed firmly at 24,050.Options data further reinforces these levels. The range of 24,300 to 24,500 holds the highest Call open interest and is set as the immediate resistance zone for the Nifty 50. Conversely, the 24,000 strike maintains the highest Put open interest and serves as a key support area.
Market Volatility and Bank Nifty Performance
The India VIX, which gauges expected market volatility, recorded a significant downturn on Friday. It fell 3.99 percent to 11.79, marking its lowest closing level since February 12. This decline signals increasing comfort for the bullish trend in the market.In contrast to the broader index's recovery, the banking sector showed weakness. The Bank Nifty closed at 57,938, shedding 93 points or 0.41 percent. On a daily basis, the banking index formed a sizeable bearish candle and entered the Weakening quadrant on the Relative Rotation Graph (RRG).
Banking Index Outlook: Targets and Support Zones
Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, provided clear targets for the banking index. The immediate resistance is set in the 58,400 to 58,500 zone. A sustainable breakout above this level could lead Bank Nifty towards short-term targets of 58,900 and subsequently 59,300.On the downside, the immediate support for Bank Nifty is identified in the tight range of 57,500 to 57,400. The banking index also experienced consolidation on a weekly timeframe, indicated by the formation of high-wave and Doji candles over the past two weeks, suggesting a lack of strong directional conviction.
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