Are Nifty and Bank Nifty Indicating a Bullish Breakout?

Mumbai, June 22 (NationPress) This week, a robust bullish candle forming an Inside Bar pattern appeared on the charts of both Nifty and Bank Nifty, signaling a resurgence of buying interest from lower levels and highlighting the market's inherent strength, as reported on Sunday.

The observed pattern is typically seen as indicative of consolidation that may lead to a potential breakout, suggesting that investor sentiment remains optimistic, bolstered by supportive technical indicators and a favorable market structure, according to Choice Broking.

The Nifty index concluded the week positively, finishing at 25,112.40 with a weekly gain of 1.59 percent.

It successfully held above the significant psychological level of 25,000, indicating a sideways-to-bullish momentum in the near future.

This price action affirms sustained buying on dips, with traders showing confidence in maintaining key support levels, as mentioned in the report.

From a technical standpoint, Nifty is well-positioned above all its major Exponential Moving Averages (EMAs) — the 20-week, 50-week, and 200-week — underscoring a strong bullish undertone.

The Relative Strength Index (RSI) has also exhibited upward movement, currently at 60.81, indicating strengthening momentum and potential for further gains, according to the brokerage firm.

"As long as the index maintains its position above the 25,000 level, the outlook is expected to remain positive, with upside targets ranging from 25,200 to 25,300," the firm stated.

"A breakout surpassing 25,300 could pave the way for a further rally towards 25,500 and 25,700," it added.

Volatility decreased during the week, with the India VIX declining by 4.09 percent to 13.6725, signaling reduced uncertainty and enhanced investor comfort.

In the derivatives market, the highest Call Open Interest is observed at the 25,200 and 25,300 strikes, establishing a near-term resistance zone,” according to the report.

Conversely, the highest Put Open Interest is clustered around 25,000 and 24,800, providing robust downside protection.

The Bank Nifty index followed a similar trajectory, gaining 1.31 percent over the week to close at 56,252.85.

The weekly formation of an Inside Bar candlestick pattern, supported by consistent trading volumes, reflects ongoing consolidation and a positive sentiment.

The index remained above the 56,200 mark, indicating active buying on declines, and the structure continues to favor a sideways-to-bullish outlook.

The index is trading above its key 20-day, 50-day, and 200-day EMAs, reinforcing the overall upward trend.

The RSI for Bank Nifty is at 64.33 and is trending upwards, confirming the strength in underlying momentum.

Immediate support is established at 56,000 and 55,500, while resistance is anticipated in the range of 56,500 to 57,000. A decisive move beyond this resistance zone could trigger a new phase of the rally.

Among the sectoral influencers, private banks like HDFC Bank and Kotak Bank, along with public sector players such as SBI and Federal Bank, are expected to support any upward movement in Bank Nifty.

In the options market, substantial Put Open Interest at 56,000 and 55,500 confirms these as crucial support levels, while Call OI at 56,500 and 57,000 highlights the immediate challenges, as per Choice Broking.