- Nifty 50 gained 461.30 points, or 1.99%, its strongest single-day rise in two months
- Index broke above its 8-day and 20-day moving averages, showing improved momentum
- Resistance lies between 23,687-23,719, near June high and 50-day moving average
The Nifty 50 posted its strongest single-day gain in more than two months on Friday, climbing 461.30 points, or 1.99%, and breaking above several near-term resistance levels. The move lifted the benchmark above its eight-day exponential moving average and 20-day moving average, pointing to an improvement in short-term momentum.
The next phase of the rally will depend on whether the index can sustain these gains and overcome resistance near its 50-day moving average. While the breakout from an eight-day trading range and the highest closing level of June support the bullish case, lower trading volumes and signs of short covering suggest the move still requires confirmation.
Volume Check
Market participation remained muted over the past two weeks, including during Friday's advance. Open interest data showed Nifty open interest fell 2.2% as the index gained nearly 2%, indicating that short covering contributed to the move.
Even so, the breakout above the recent trading range and the strong close provide a constructive near-term setup for the benchmark.
Resistance Ahead
The 23,687-23,719 zone is expected to serve as the immediate resistance area, with both the June 1 high and the 50-day moving average located near these levels.
A close above this band would strengthen the case for a further advance. If the index sustains above the zone, it could move towards 23,830, where a downward-sloping trendline drawn from the April 21, 2026 swing high is placed. A decisive close above that trendline could improve momentum further and open the path towards the late-May swing high of 24,089.
Support Levels
On the downside, immediate support is seen in the 23,556-23,538 range, where the upper boundary of the previous trading range converges with the 20-day moving average.
If the index slips below the 20-day moving average and closes under Friday's low of 23,314, the near-term outlook could weaken. In that scenario, support may emerge near 23,100, which corresponds to the 61.8% Fibonacci retracement of the rally from the April 2 low to the April 21 high.
Momentum Signals
Technical indicators have improved following Friday's rally. The 14-day Relative Strength Index has moved above 50, while the weekly RSI has rebounded after finding support near 40. The Moving Average Convergence Divergence indicator is also close to generating a bullish crossover.
Monday's trading session will be important in determining whether the breakout can sustain. A move above the 50-day moving average would strengthen the case for continued upside momentum.
Stock In Focus
Pitti Engineering has broken out of a month-long triangular consolidation pattern, supported by higher volumes and strong price action.
The breakout was accompanied by a wide-range bullish candle. NSE trading volume reached 1.04 lakh shares on Friday, exceeding both the 10-day and 30-day average volumes, indicating increased participation.
The stock is trading above its key moving averages, signalling strength across short- and medium-term time frames. Bollinger Bands have also started to expand after a period of contraction, suggesting volatility is returning following consolidation.
Momentum indicators remain supportive. The 14-day RSI has climbed above 60 for the first time in more than a month, while the daily MACD has generated a bullish crossover.
The technical setup suggests the stock could test Rs 1,045 initially and then Rs 1,120 in the coming sessions. A stop loss may be placed at Rs 938.
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