Market Overview

On June 16, 2025, the Nifty 50 index experienced a volatile trading session, closing at 24,940.95, down 75 points or 0.4% from the previous session. The index opened at 24,946.50 and saw a high of 24,957.95 and a low of 24,940.50 during the day. Trading volume stood at 313.1 million shares, reflecting active participation amidst choppy market conditions.

Technical Analysis

Price Action and Bollinger Bands

The 1-hour chart of the Nifty 50 shows the index trading within Bollinger Bands (20-period SMA, 2 standard deviations). The middle band, which is the 20-period Simple Moving Average (SMA), is at 24,847.10, indicating the short-term trend. The upper band is at 25,109.96, and the lower band is at 24,584.25.

• Early June Surge: From May 28 to June 4, the index saw a steady uptrend, breaking above the upper Bollinger Band around June 3, reaching a peak near 25,300. This breakout signaled strong bullish momentum, often associated with overbought conditions.
• Mid-June Correction: Between June 4 and June 10, the index experienced a sharp correction, dropping below the 20-period SMA and touching the lower Bollinger Band near 24,584.25. This pullback indicated profit-taking and a potential reversal in sentiment.
• Consolidation and Recovery: Post-correction, the Nifty 50 entered a consolidation phase, oscillating between the 20-period SMA and the lower Bollinger Band. By June 12, the index began a recovery, climbing back toward the 20-period SMA and briefly touching the upper band again around June 14.
• Recent Movement: On June 16, the index is trading just above the 20-period SMA at 24,940.95, showing signs of consolidation after the recent recovery. However, the failure to sustain above the 25,000 mark suggests caution among investors.

Relative Strength Index (RSI)

The RSI (14-period) on the 1-hour chart is currently at 54.14, placing it in the neutral zone (between 30 and 70). The RSI peaked above 70 (overbought) around June 3, coinciding with the index’s rally to 25,300. It then dropped to 40.45 during the correction phase, narrowly avoiding the oversold territory (below 30). The recent recovery has brought the RSI back to a balanced level, indicating neither overbought nor oversold conditions at the moment.

• Interpretation: The neutral RSI suggests that the market is in a wait-and-watch mode, with no immediate signs of extreme momentum in either direction. However, a drop below 50 could signal renewed selling pressure, while a move above 60 might indicate a return of bullish sentiment.

Volume Analysis

Trading volume on June 16 was 313.1 million shares, which is relatively high compared to the average volume over the past month. Spikes in volume were noticeable during the early June rally and the subsequent correction, reflecting heightened market activity during those periods. The current volume suggests active participation, but without a clear directional bias, as the index remains range-bound.

Market Sentiment and Key Levels to Watch

The Nifty 50’s current position just above the 20-period SMA (24,847.10) indicates a neutral-to-bullish bias in the short term. However, the inability to break above the psychological 25,000 level and the upper Bollinger Band (25,109.96) suggests resistance to further upside.

• Support Levels: Immediate support lies at the 20-period SMA (24,847.10). A break below this could see the index test the lower Bollinger Band at 24,584.25, a key level that held during the mid-June correction.
• Resistance Levels: On the upside, the 25,000 mark remains a psychological barrier, with the upper Bollinger Band at 25,109.96 acting as a stronger resistance. A sustained break above this could signal a resumption of the bullish trend.

Broader Market Context

The Indian market has been navigating global uncertainties, including fluctuations in crude oil prices, geopolitical tensions, and expectations around monetary policy decisions from the Reserve Bank of India (RBI). Domestically, investors are also monitoring the upcoming quarterly earnings season, which could influence sector-specific movements within the Nifty 50.

Conclusion

The Nifty 50’s performance on June 16, 2025, reflects a market in consolidation after a volatile few weeks. While the index remains above its 20-period SMA, signaling a mild bullish bias, the failure to break above 25,000 and the neutral RSI suggest caution. Traders should watch for a breakout above 25,109.96 for bullish confirmation or a drop below 24,847.10 for bearish signals. Volume trends and broader market developments will also play a crucial role in determining the next directional move.

Disclaimer

The information provided in this article is for informational purposes only and does not constitute financial advice. Investing in the stock market involves risks, and past performance is not indicative of future results. Readers are advised to conduct their own research or consult with a qualified financial advisor before making any investment decisions. The author and the publication are not responsible for any financial losses incurred as a result of acting on the information provided herein.