Technical View: Nifty stages strong bullish breakout, targets 23,600; Bank Nifty must defend 20-day EMA to sustain uptrend
The Nifty 50 may encounter its next resistance around 23,500. This is followed by resistance near 23,600. A decisive move above these levels could strengthen the prospects of an advance towards 23,800–24,000.
The Nifty 50 registered its biggest single-day gain in nearly five months, rising 1.68 percent and marking a strong start to November. The rally was largely driven by index heavyweight Reliance Industries, which surged 11.6 percent following better-than-expected Q2FY27 earnings. The benchmark index opened and closed decisively above its October swing high and the 50-day EMA, accompanied by strong bullish momentum on November 2.
However, the India VIX continued to hover in the elevated zone, suggesting some caution among market participants. Falling crude oil prices in international markets also supported investor sentiment. Brent crude oil futures declined more than 3 percent at the time of writing, although prices remained comfortably above the US$100-per-barrel mark. Going forward, the Nifty 50 may encounter its next resistance around 23,500, which coincides with the 100-day EMA and the 50% Fibonacci retracement level of the correction from 24,774 to the October 8 low.
This is followed by resistance near 23,600, the upper boundary of the bearish gap formed on September 9. A decisive move above these levels could strengthen the prospects of an advance towards 23,800–24,000. On the downside, Monday's low of 23,200 is likely to act as immediate support, according to market experts. The Nifty 50 opened above the 23,200 mark and held comfortably above this level throughout the session.
It touched an intraday high of 23,440.8, supported by a sharp rally during the closing auction session, and settled at the same level, gaining 388 points or 1.68 percent. This marked its biggest single-day percentage gain since June 12. On the daily timeframe, the index formed a long bullish candle following a gap-up opening. It also witnessed an uptrend continuation pattern on the intraday charts, indicating the possibility of further upside from current levels.
Shrikant Chouhan, Head of Equity Research at Kotak Neo, believes that the short-term market trend has turned positive. However, he advised day traders to follow a strategy of buying on dips and selling on rallies. According to him, 23,300 and 23,200 would act as key support levels, while the uptrend could extend towards 23,500–23,650 on the upside. However, a sustained move below 23,200 could make the prevailing uptrend vulnerable, prompting traders to consider exiting their long positions, he said.
Momentum indicators also strengthened, with the Relative Strength Index (RSI) climbing to 61.03, indicating improving bullish momentum. The Moving Average Convergence Divergence (MACD) moved closer to the zero line following a bullish crossover, while the green histogram bar expanded for the third consecutive session, signalling further strengthening in positive momentum. The weekly options data indicated that the 23,500 and 23,600 strikes, which have the highest concentration of Call open interest, could act as immediate resistance levels for the Nifty 50.
On the downside, the 23,000 strike, which has the highest Put open interest, could provide crucial support, followed by the 23,200 and 23,100 strikes, which have the next-highest concentrations of Put open interest and could act as additional support levels. Meanwhile, the India VIX, also known as the fear index, rose 1.29 percent to 15.50, extending its upward trajectory for another session. Its elevated reading suggests that some caution may persist among bullish market participants.
A decisive decline below the 13–14 zone could provide greater comfort to the bulls. The Bank Nifty gained 315 points, or 0.58 percent, to close at 55,002, underperforming the benchmark Nifty 50. On the daily charts, the banking index formed a bullish candle with a noticeable lower shadow, largely remaining within the previous session's trading range. This indicated a positive undertone, although the index continued to witness range-bound trading.
The Bank Nifty moved marginally above its 20-day EMA at 54,971, a crucial level for sustaining further upside. However, it continued to trade below its 50-day and 200-day EMAs, indicating that the broader technical structure remains relatively weak. The RSI continues to remain in neutral territory, while the relatively flat MACD suggests that the index is likely to remain in a consolidation phase until a decisive breakout emerges, said Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities.
According to Shah, the 54,400–54,500 zone will act as immediate support, while the 55,500–55,600 range remains the immediate resistance. A decisive breakout beyond either of these levels could determine the banking index's next directional move.
