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Nifty 50 Outlook for May 29, 2025 – 4H Technical Breakdown & Forecast

As we head into May 29, 2025, the Nifty 50 seems to be caught in a tug-of-war between weakening momentum and critical price support zones. Let’s break down what the 4-hour chart reveals and where the index may be headed next.

Current Price Action (4H View)

Nifty closed the session on May 28 at 24,752.45, slipping nearly 0.30% lower. On the 4-hour chart, price action reflects sideways-to-weak consolidation, with visible signs of exhaustion after a recent attempt to break higher. Sellers have gradually regained control near the 24,800–24,850 resistance belt.

4H Key Technical Indicators

Moving Averages (EMA Focus):

• 21-EMA & 50-EMA on the 4H chart have recently crossed over bearishly – signaling short-term weakness.
• Price is trading slightly below both EMAs, showing a loss of momentum.
• Support zone from 100-EMA lies near 24,620–24,650, a must-hold area to prevent deeper correction.

RSI (14):

• Currently hovering near 46–48, slightly below the neutral zone.
• Indicates mild bearish bias but not in oversold territory yet.

MACD (12, 26, 9):

• Bearish crossover is active.
• Histogram shows increasing negative momentum – further downside likely unless momentum wanes.

ADX (14):

• Reading around 24, indicating a weak but developing trend.
• Any spike in ADX from here could strengthen bearish continuation.

Stochastic Oscillator:

• Remains in the overbought region (~95+), flashing a strong mean-reversion signal.
• Suggests a pullback or minor correction is likely before any fresh upside move.

Support & Resistance Zones (4H Focus)

• Immediate Resistance: 24,800–24,850 (where selling has been observed repeatedly).
• Major Support: 24,620–24,700 (confluence of previous swing low + 100 EMA support).
• A breakdown below 24,620 on the 4H chart could attract heavier selling toward 24,480.
• Conversely, a strong close above 24,850 may fuel a short-covering rally up to 25,000.

Price Structure & Market Psychology

The structure suggests distribution, with bulls gradually losing strength. Despite occasional buying near support, there is hesitation to carry the momentum beyond resistance. The market might be waiting for a directional trigger, possibly from global cues or domestic news.

Options Activity & Sentiment Check

• Heavy call writing at 24,800 strike hints at stiff resistance.
• Put base stands firm at 24,700, but a breakdown here could cause unwinding.
• OI trends favor a range-bound to bearish stance unless fresh long positions are built above 24,850.

Price Action Context

The Nifty 50 closed at 24,752.45, continuing its mild pullback from the recent highs. Price is forming a lower high structure on the 4H chart, and candles are compressing, which often precedes a volatile breakout.

• Market Structure: Forming a mini descending triangle – bearish bias unless broken to the upside.
• Volatility Squeeze: Bollinger Bands are contracting – signaling a potential expansion move ahead (direction TBD).

Enhanced Technical Indicators (4H)

Fibonacci Retracement Levels:

Measured from the recent swing low (~24,250) to swing high (~24,920):

• 38.2% retracement: 24,650 – Strong confluence support.
• 50% level: 24,585 – Psychological and structural support.
• 61.8% retracement: 24,520 – Last line before trend reversal.

Volume Profile Analysis:

• Highest volume nodes (POC) are clustered around 24,700–24,720.
• Price trading near POC indicates indecision; a break with volume can bring sharp moves.
• Volume during declines > volume during rallies = distribution phase.

RSI Divergence Watch:

• RSI has not confirmed the last price high – showing bearish divergence.
• Momentum is weakening, although no sign of capitulation yet.

OBV (On-Balance Volume):

• Sloping downward even as price stayed range-bound.
• Confirms that smart money is exiting positions quietly.

Market Breadth & Internals

• Advance-Decline Ratio for Nifty stocks is falling – indicates narrow leadership.
• Sector Leaders (IT, Pharma, Metals) are lagging.
• High-beta stocks (banks, autos) under pressure = lower risk appetite.

Conclusion: Market breadth is narrowing – confirming weakness beneath the index surface.

Sector Rotation Insight

• Defensive sectors like FMCG and pharma showing relative strength.
• High growth / cyclical sectors like auto, metal, and realty facing supply pressure.
• This rotation into low beta sectors hints at a risk-off environment.

Key Zones to Watch (4H Timeframe)

Risk Management & Strategy

• Positional Traders: Consider reducing long exposure or hedging via options.
• Scalpers/Intraday: Lean short if price closes below 24,700 with increasing volume.
• Options Players:
  • Sell OTM calls above 24,800 if resistance holds.
  • Hedge with long puts near 24,700 for downside protection.

Scenario-Based Forecast

Bullish Continuation (Low Probability):

• Needs strong breakout above 24,850 with volume.
• Target: 25,000–25,100.

Sideways (Neutral):

• If Nifty hovers between 24,650 and 24,850, expect a choppy session.
• Option selling could work well here (iron condor/straddles).

Bearish Breakdown (Higher Probability):

• Break below 24,650 can trigger quick sell-off to 24,520.
• Breakdown volume spike would confirm smart money exit.

Final Verdict (4H Bias)

→ Tactical Play: Stay light. Sell into resistance. Monitor global cues closely, especially Dow futures and USDINR movement.

Conclusion: What to Expect Next (4H Bias)

Short-Term Bias: Cautious to Bearish
Preferred Strategy: Watch for breakdowns below 24,700 for short entries. Avoid aggressive longs until 24,850 is decisively crossed.

If Nifty remains below the 21/50 EMA zone and fails to reclaim 24,800, it opens the door for a retest of 24,600–24,480 in the short term. Only a breakout and close above 24,850 will restore bullish control on the 4H timeframe.