Nifty 50 Eyes 24,600 as Bulls Gain Momentum; Bank Nifty Consolidates Near 58,700

The Indian stock market closed Tuesday with modest gains, but the real story lies in what comes next. The Nifty 50 rose 160 points, or 0.66 percent, to finish at 24,430, while the Bank Nifty climbed 353 points, or 0.61 percent, to 58,292. On the surface, this looks like a straightforward rally. But beneath the numbers, market technicians are reading conflicting signals—some pointing toward further upside, others warning that momentum may be fading.

The Nifty's immediate target is 24,600, which marks the index's April high. Breaking through that level could open a path to 24,800 and eventually 25,000. Support sits at 24,300 and 24,200, with a deeper floor at 24,000. According to Jay Thakkar, Vice President and Head of Derivatives and Quant Research at ICICI Securities, the medium-term breakout has strengthened, with the base shifting higher to 23,800 from 23,500. Foreign institutional investors have reduced their net index short positions by nearly 10,000 contracts, leaving roughly 2.50 lakh contracts still outstanding as of last week—a sign that short covering could fuel further gains. Thakkar recommends buying Nifty futures at current levels and adding on dips near 24,300, with a stop-loss below 24,150 and targets at 24,600 and 24,800.

Somil Mehta, Head of Retail Research at Mirae Asset ShareKhan, takes a similarly bullish view. The Nifty broke past the major resistance zone of 24,100-24,200 last Friday, and Monday's follow-through buying reinforced that momentum. Mehta sees the index advancing toward 24,600-24,750, with a decisive move above 24,750—the 61.8 percent Fibonacci retracement level—potentially confirming a strong medium-term uptrend and bringing 25,000 into focus. His strategy mirrors Thakkar's: buy at current market price or on dips, with a stop-loss at 24,000 on a closing basis and targets of 24,750 to 25,000.

But Jigar S Patel, Senior Manager of Equity Research at Anand Rathi, injects caution. On the hourly chart, the Nifty is showing bearish divergence on both the RSI and MACD indicators, meaning momentum is weakening even as prices hover near recent highs. The 24,550-24,600 zone continues to act as strong resistance, where selling pressure is likely to emerge. Patel cannot rule out a short-term pullback or profit-booking phase, though he views any such correction as healthy within the prevailing uptrend rather than a trend reversal. His strategy is to sell Nifty futures in the 24,450-24,550 range, with a stop-loss at 24,650 and a target of 24,200.

The Bank Nifty tells a similar story of strength meeting resistance. The index has been consolidating over the past couple of sessions within a 57,300-58,700 range, with the broader trading band now seen at 57,000-59,000. A breakout on either side could result in a move of 1,500 to 2,000 points. Thakkar notes that the Bank Nifty has been the market leader during the recent rally, with private sector banks continuing to trend higher and short covering evident across most private banking stocks. The medium-term trend remains positive as long as the index holds above 58,000, which currently has the highest Put open interest. His strategy is to buy Bank Nifty futures above 58,750, with a stop-loss below 58,000 and targets of 59,500 and 60,000.

Mehta sees the Bank Nifty's recent breakout above 57,800-58,000 and its consolidation above that range as encouraging for bulls. He expects the index to break out of its sideways pattern and move toward 59,250, a level that coincides with the 78.6 percent Fibonacci retracement of the previous decline and could eventually open the door to a retest of the record high of 61,765 over the next few weeks. His strategy is to buy at current market price or on dips toward 57,800, with a stop-loss at 56,850 on a closing basis and targets of 59,250 to 61,765.

Patel, however, sounds a similar warning for Bank Nifty. The index is showing bearish divergence on the hourly chart, with momentum weakening despite prices near recent highs. The Bank Nifty has struggled to sustain above 58,700 over the past three to four trading sessions, highlighting strong overhead supply. The 58,700-58,800 zone continues to act as crucial resistance, where selling pressure is likely to emerge. A short-term pullback or profit-booking phase cannot be ruled out.

One other detail worth noting: market breadth on July 7 remained negative, with around 1,645 stocks declining against 1,371 advancing stocks on the National Stock Exchange. This suggests that while the headline indices are climbing, the broader market is not participating equally in the rally. The Put-Call Ratio for the weekly Nifty series stands at 1.46, at the higher end of the range, indicating an overbought scenario. For traders and investors, the message is clear: the medium-term trend is up, but the near term is crowded with profit-takers and technical warnings.