With a breakout above key resistance and cooling volatility, Nifty enters a new phase of upward momentum. Analyst believes bulls remain in control as long as 24,800 holds.

The Indian equity market saw a decisive shift in sentiment last week, as the Nifty 50 index crossed the psychologically significant 25,000 mark for the first time in nearly seven months. 

According to SEBI-registered analyst Mayank Singh Chandel, it marked a meaningful breakout supported by strong volume and broad-based market participation.

On the weekly chart, a large bullish candle took shape, closing near the week’s high: a clear signal of bullish momentum. The index moved past previous swing highs, forming a “higher high, higher low” pattern, a textbook sign of an emerging uptrend. 

The 24,800 level, previously a strong resistance zone, was convincingly breached and is now expected to act as a solid support base going forward.

From a technical standpoint, he highlights that the Relative Strength Index (RSI) on the weekly chart hovered around 62, indicating healthy momentum without yet entering overbought territory. 

Additionally, the Nifty traded comfortably above its major moving averages, including the 10-week exponential moving average, reaffirming trend strength.

Derivatives and open interest (OI) data further corroborated the bullish case, he added. 

A mild decline in Nifty Futures OI, combined with a robust price rally, pointed to short-covering activity — a strong indicator of market strength. 

On the options front, the highest call open interest was observed at the 25,500 level, suggesting this may serve as a near-term resistance. 

Meanwhile, strong put bases at 25,000 and 24,800 underscored support zones. The put-call ratio (PCR) at 0.77 reflected some caution, but aggressive put writing indicated continued bullish sentiment.

Foreign portfolio investors (FPIs) showed slight caution, with the long-short ratio dipping to 42.37%. 

While this suggests some profit-taking or hedging, FPIs remained net long — a sign that institutional confidence in the market was intact. Moreover, every dip was met with strong buying interest, signaling ongoing accumulation.

Volatility, too, offered a favorable backdrop. The India VIX index dropped over 23%, settling near 16. 

A falling VIX in an uptrending market is often considered a green flag for trend-following traders, as it reflects reduced fear and growing confidence.

Weekly Outlook

Looking ahead, the immediate resistance zone lies between 25,300 and 25,500. Sustaining above 25,150 could trigger a swift move toward 25,500, he added

Conversely, failure to clear this zone might invite profit booking. On the downside, 24,800 is a crucial level to watch. 

Chandel believes that as long as the index holds above this support, the “buy on dips” strategy remains valid.

In summary, Nifty appears to have shifted gears decisively. With strong price action, a favorable technical setup, declining volatility, and supportive derivatives data, the bulls are back in the driver’s seat. 

While near-term resistance levels must still be navigated, the broader trend remains constructive and investors may want to maintain a bullish bias unless the index breaks below 24,800.

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