Technical View: Nifty 50 hits 2-month high, eyes 24,000 as bulls maintain control; Bank Nifty targets October swing high

The next resistance for the Nifty 50 is placed at 23,900, around its 200-day EMA. A sustained move above this level would confirm a shift in the broader market structure from weak to bullish in the near term. The psychological 24,000 mark is expected to be the next resistance, followed by the crucial hurdle zone of 24,200–24,400. On the downside, the 23,600–23,500 zone is likely to act as immediate support for the index, according to market experts.

The sharp correction in crude oil prices during the previous session supported market sentiment, although Brent crude oil futures continued to trade above the $100-a-barrel mark. The Nifty 50 opened higher at 23,582 and extended its uptrend as the session progressed. It touched an intraday high of 23,811 during the closing auction session, which was also its closing level, up 370 points or 1.58 percent.

This was the index's highest closing level since September 4. The Nifty 50 decisively closed above its 50-day EMA on Monday, followed by a move above the 100-day EMA on Tuesday. Its short-term moving averages are also trending upwards, signalling growing confidence among the bulls. The index is now just around 100 points away from its 200-day EMA. Additionally, the index convincingly surpassed the 50 percent Fibonacci retracement level of the decline from 24,774 to 22,180.

The RSI climbed further to 66.59, while the MACD moved above the zero line, with its green histogram bar expanding for the fourth consecutive session. These indicators collectively point to strengthening bullish momentum and an improving technical outlook. A long bullish candle on the daily chart signals a decisive breakout. The unfilled upward opening gaps formed over the last couple of sessions also coincide with bullish runaway gaps, which are generally considered continuation patterns in an uptrend.

According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, the underlying trend of the Nifty remains sharply positive, with the next upside level to watch around 24,200 in the near term. "Any dips could find support around 23,600 level," he said. Weekly options data indicates that 24,000 could act as a crucial hurdle for the Nifty 50, as the strike has the highest concentration of Call open interest.

On the downside, the 23,500 and 23,600 strikes have the highest Put open interest and could provide immediate support to the index. Meanwhile, the India VIX, the market's fear gauge, extended its uptrend for the third consecutive session, rising 1.44 percent to 15.72. The continued rise in volatility may warrant some caution among bulls. The Bank Nifty rallied 538 points, or 0.98 percent, to close at 55,540 amid heightened volatility, but underperformed the Nifty 50 for another session.

On the daily chart, the index formed a small-bodied candle with shadows on either side, indicating indecision near key levels. The banking index is currently hovering around its 50-day EMA but remains comfortably above its short-term moving averages. The daily RSI is near the 54 mark and continues to trend higher, suggesting a gradual improvement in momentum. The MACD maintained its bullish crossover, with the green histogram bar expanding for the third consecutive session, indicating strengthening positive momentum.

"The zone of 56,000–56,100 is likely to act as an immediate resistance area for the index. A decisive and sustained move above 56,100 could trigger a fresh upside rally towards the 56,600 level," said Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities. On the downside, the 55,100–55,000 zone is expected to provide strong support and may cushion any near-term corrective decline, he added.