Momentum Fades at Higher Level, Caution Creeps In

Om Mehra, Technical Research Analyst, SAMCO Securities

Nifty ended the session at 25,860.10, slipping 0.64%, as the index failed to sustain near the upper Bollinger Band and witnessed a pullback from recent highs. The index is now drifting back toward the mean from recent swing highs.

Nifty has slipped below the 9-EMA, which is positioned near 26,000, indicating a shift toward a short-term downward trend. The index has also fallen below the middle Bollinger Band.

A bearish candle formed during the session, showing selling pressure during intraday as well.

The RSI has cooled to 47, slipping below the neutral mark and confirming waning momentum. The indicator is now trending lower without any visible positive divergence, indicating that upside traction has weakened in the near term. The MACD has moved deeper into the negative zone, with the histogram expanding marginally on the downside.

On the downside, 25,720 emerges as the next support zone. A decisive close below this level may expose 25,650-25,600, where the Supertrend is placed. On the higher side, 26,000-26,050 now acts as an important resistance band, and only a sustained close above this zone would revive bullish momentum.

Overall, the near-term outlook has shifted from a buy-on-dips approach to a range-bound to mildly cautious stance, and to stay selective and wait for clearer directional confirmation.

Nifty Bank ended the session at 59,034.60, down 0.72%, slipping toward the lower end of the day's range. A bearish daily candle reflects selling pressure from higher levels and a lack of follow-through buying.

The index has closed below the middle Bollinger Band. However the broader trend support remains intact, as the Supertrend is placed at 58,350, which acts as an important medium-term cushion.

The RSI is placed at 51, slipping toward the neutral mark. The MACD remains above the zero line, but the histogram has turned negative, suggesting weakening momentum in the near term.

On the downside, the immediate support zone remains at 58,800 to 58,700, aligned with the lower Bollinger Band. A close below these levels may open the window toward 58,500. On the higher side, 59,300 remains the first hurdle, and a sustained close above 59,300 to 59,350 would be required to regain a bullish trend.

Unless Nifty Bank reclaims and holds above 59,300 on a closing basis, the near-term tone remains range-bound with a mildly cautious outlook. However, the index may oscillate within the broader 58,700 to 59,300 band in the next session.

Source : Equity Bulls

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