The new monthly expiry began on a very promising and encouraging note, with NIFTY rallying to the highs of the previous week. Following a gap-up opening, buyers maintained firm control throughout the session, steadily pushing prices higher and extending the bullish momentum. Although some profit booking emerged towards the fag end of the session buy, buyers managed to secure a close near the day’s highs, with NIFTY ending the session at 24250, registering a robust gain of 1.10%.

From an environment dominated by fear on Friday morning, where prices threatened to break below a key upward sloping trendline support, to a markedly contrasting market sentiment where the index has recouped all the losses from the previous week, NIFTY has staged a remarkable turnaround. The swift recovery highlights the resilience of buyers and suggests that the recent weakness may have been a temporary shakeout rather than the beginning of a sustained downtrend. This reversal is aptly reflected on the 1-minute 1% × 3 Point & Figure chart, where prices, after initially triggering a Bearish Triangle Breakdown, have now formed a Bullish Bear Trap, signaling a decisive shift in control from sellers to buyers. The presence of a Bullish ABCD formation on the Daily 0.5% Renko chart further reinforces the improving technical backdrop and adds weight to the developing bullish reversal. Despite the positive developments over the past three sessions, caution remains warranted. The index continues to trade within its broader consolidation range, while a series of formidable overhead resistance levels, which have repeatedly capped rallies in recent weeks, continue to pose a challenge. As a result, participants should avoid chasing the current up move and instead wait for a pullback towards the 24050–23960 support zone before considering fresh long positions. From a level’s perspective, the 24350–24400 band remains the immediate resistance zone, followed by a stronger hurdle in the 24530–24580 range. On the downside, the 24050–23960 band is expected to provide immediate support and may offer a favorable risk-reward opportunity for fresh long positions.

A breakout on the NIFTY 500 / NIFTY 50 ratio chart suggests that the broader NIFTY 500 universe is likely to continue outperforming the large-cap NIFTY 50 constituents. That said, participants should maintain a selective, stock-specific approach. Fresh positions should preferably be initiated only in relatively strong stocks on retracements towards well-defined support zones, as chasing momentum at current levels does not appear to offer a favorable risk-reward proposition.

Key levels to watch

NIFTY

Support: 24050- 23960

Resistance: 24350- 24400

BANKNIFTY

Support: 56650 – 56500

Resistance: 57400 – 57550

Hitesh Rathi, Technical Analyst -Equity & Derivatives, Angel One.