The Nifty’s short-term technical structure has improved after crossing the crucial resistance level of 22,800 and settling just below the psychological 23,000 mark on 15 October.
The breakout indicates an improvement in buying momentum and that the recent recovery is gaining traction. However, the question remains: will the momentum sustain?
According to Jigar S. Patel, Senior Manager of Equity Technical Research at Anand Rathi Share and Stock Brokers, a breakout above resistance is an encouraging technical development, but it does not necessarily confirm a complete trend reversal.
“The index must demonstrate its ability to sustain higher levels and absorb selling pressure near the next important resistance zone. Therefore, the focus now shifts towards the 23,000–23,150 range, which is expected to act as a significant hurdle for the ongoing recovery,” said Patel.
Momentum analysis: Hourly RSI signals strength
Patel underscored a notable development in the movement of the hourly Relative Strength Index (RSI).
The hourly Relative Strength Index (RSI) is above 70 for the first time since August 2026. This indicates a significant improvement in short-term buying momentum and highlights the strength of the recent recovery.
However, Patel added that an RSI reading above 70 also suggests that the index has entered an overbought zone on the hourly timeframe.
“While this does not automatically signal an immediate reversal, it raises the possibility of temporary profit booking or consolidation before the next directional move,” said Patel.
The behaviour of the hourly RSI during any corrective phase will be crucial.
“If the indicator manages to sustain above the 30 level during a pullback, it would suggest that the underlying recovery remains intact. Conversely, a sharp deterioration in momentum, accompanied by weakness in price, could indicate that the current up-move is losing strength,” said Patel.
Resistance zone: 23,000–23,150 in focus
According to Patel, the 23,000–23,150 zone is likely to be the next major challenge for the Nifty. As the index approaches this range, traders should closely monitor the price action for signs of resistance and potential selling pressure.
“The formation of a potential extended double top near this zone cannot be ruled out. Such a pattern would indicate that the index is struggling to move decisively above an important supply area. However, the pattern remains a possibility rather than a confirmed reversal signal and would require appropriate price confirmation,” said Patel.
“A decisive move above 23,150, supported by sustained buying momentum, could weaken the bearish implications of this potential formation and improve the outlook for further recovery. Until then, the resistance zone warrants caution,” Patel said.
Support and retest analysis
Patel said the immediate focus remains on the 22,800 level, which could undergo a role reversal from resistance to support following the recent breakout.
“A successful retest of this level, followed by renewed buying interest, would strengthen the bullish structure and improve the probability of a sustained recovery. On the other hand, a failure to hold above 22,800 could indicate a weak breakout and increase the possibility of renewed selling pressure,” said Patel.
While the Nifty’s breakout above 22,800 and the improvement in hourly RSI momentum are positive technical developments, it should be noted that the index is approaching a critical resistance zone at 23,000–23,150, where profit booking and consolidation may emerge.
“A sustained move above 23,150 would strengthen the recovery, while a successful retest of 22,800 would provide additional confirmation of underlying strength. Until these developments unfold, traders should remain selective and closely monitor price action and hourly RSI behaviour,” said Patel.
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Disclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
