Technical View: Nifty Needs to Hold Above 20-SMA for Rally; Bank Nifty Eyes 59,500

The Nifty 50 saw its two-day rally come to an end on December 15, closing slightly down. The index encountered resistance around the 20-day Simple Moving Average (SMA), near 26,031, which aligns with a downward-sloping resistance trendline. Although the Nifty closed above short-term moving averages, it couldn't maintain a position above the 20-day SMA. According to market analysts, a sustained close above this level is essential for further gains toward the 26,100-26,200 range. Until then, the index may consolidate, with immediate support around 25,900, followed by 25,750-25,700.

The Nifty 50 began the day lower at 25,930 and reached an intraday low of 25,905. It recovered somewhat during the morning session, approaching the previous day's close, but it couldn't maintain those gains. The index closed above the 26,000 mark at 26,027, a decrease of 20 points. A bullish candle formed on the daily chart, but the index didn't close above the previous day's high.

Nilesh Jain, Head of Technical and Derivatives Research at Centrum Broking, noted that immediate support lies around 25,900, with the 50-day DMA near 25,770 providing further support. He added that a decisive move above 26,100 could lead to further gains toward 26,250.

The overall trend is still positive, with a buy-on-dips strategy favored as long as the index remains above 25,700, according to Jain.

Technical indicators suggest improving momentum. The Stochastic RSI showed a bullish crossover, and the RSI, at 53.68, is nearing the reference line. The MACD remained below the reference line, but the histogram's weakness lessened.

Options data for the week indicates an expected range of 25,900-26,200 for the Nifty 50 in the near term.

Maximum Put open interest was observed at the 26,000 strike, followed by the 25,900 and 25,950 strikes, with maximum Put writing at the 25,900, 25,950, and 26,000 strikes. On the Call side, the 26,100 strike showed the highest open interest, followed by the 26,200 and 26,000 strikes, with maximum Call writing at the 26,100, 26,200, and 26,050 strikes.

**Bank Nifty**

The Bank Nifty outperformed the Nifty 50, gaining 72 points to close at 59,462. A bullish candle on the daily chart suggests buying interest at lower levels.

The index remained above all key moving averages and the Bollinger Bands midline. The Stochastic RSI stayed positive, and the RSI increased to 59.18, although remaining below the reference line. The MACD was also below the reference line, but the histogram's weakness continued to decrease, indicating increasing momentum and underlying strength.

Hrishikesh Yedve, AVP – Technical and Derivative Research at Asit C Mehta Investment Intermediates, stated that 58,800-58,900 will serve as immediate support for the Bank Nifty, while 60,000-60,120 will act as strong resistance.

Yedve advises short-term traders to consider buying near support levels and selling near the resistance levels mentioned.

The India VIX, a measure of market volatility, increased by 1.41 percent to 10.25, remaining favorable for bulls after a four-day decline.