Key Points

The pattern, often seen as a sign of consolidation followed by potential breakout, suggests that investor sentiment remains optimistic amid supportive technical indicators and favourable market structure, according to Choice Broking.

The Nifty index ended the week on a strong note, closing at 25,112.40 with a weekly gain of 1.59 per cent.

The index maintained its position above the crucial psychological level of 25,000, pointing to a sideways-to-bullish momentum in the near term.

The price action confirms sustained buying on dips, with traders showing confidence in defending key support zones, the report said.

Technically, Nifty remains well-positioned above all its major Exponential Moving Averages (EMAs) -- the 20-week, 50-week, and 200-week -- highlighting a strong bullish undertone.

The Relative Strength Index (RSI) has also shown upward movement, currently standing at 60.81, which indicates strengthening momentum and potential for further gains, according to the brokerage firm.

"As long as the index holds above the 25,000 level, the bias is expected to remain positive, with upside targets in the range of 25,200 to 25,300," the firm stated.

"A breakout above 25,300 could open doors for a further rally towards 25,500 and 25,700," it added.

Volatility eased during the week, with the India VIX falling by 4.09 per cent to 13.6725, signalling reduced uncertainty and growing investor comfort.

"In the derivatives segment, the highest Call Open Interest is observed at the 25,200 and 25,300 strikes, establishing a near-term resistance zone,” the report stated.

"On the other hand, the highest Put Open Interest is clustered around 25,000 and 24,800, offering strong downside protection," it added.

The Bank Nifty index mirrored a similar trend, gaining 1.31 per cent over the week to close at 56,252.85.

The weekly formation of an Inside Bar candlestick pattern, supported by steady trading volumes, reflects ongoing consolidation and positive sentiment.

The index managed to stay above the 56,200 mark, suggesting buyers are active on declines, and the structure continues to favour a sideways-to-bullish outlook.

The index is trading above its key 20-day, 50-day, and 200-day EMAs, which reinforces the overall uptrend.

RSI for Bank Nifty stands at 64.33 and is trending upwards, confirming the strength in underlying momentum.

Immediate support is placed at 56,000 and 55,500, while resistance lies in the range of 56,500 to 57,000. A decisive move above this resistance zone could lead to a fresh leg of the rally.

Among sectoral drivers, private banks like HDFC Bank and Kotak Bank, along with public sector players such as SBI and Federal Bank, are expected to lend support to any upward move in Bank Nifty.

"In the options market, high Put Open Interest at 56,000 and 55,500 confirms these as key support levels, while Call OI at 56,500 and 57,000 highlights the immediate hurdles," as per Choice Broking.

- IANS