NIFTY 50 : 1-Hour Chart Analysis with Divergence (as of 26-May-2025) - Alarming divergence !!!!

The market often signals its intentions through subtle indicators before major moves unfold — and RSI divergence is one of the most powerful tools a trader can use to catch those moments. On 26 May 2025, both Nifty 50 and Bank Nifty showed sharp price moves upward, but a closer look at the RSI (Relative Strength Index) reveals developing bearish divergences. While prices attempted to reclaim previous highs, RSI values stayed flat or even declined, hinting at underlying weakness. This makes RSI divergence crucial today for predicting possible reversals, range shifts, or breakout traps in the session ahead.

Divergence Check

RSI Divergence

• Observation:

Recent price highs around 25,050 matched earlier price highs, but RSI is slightly lower now than it was on the previous high.

 Hidden Bearish Divergence:

• Price making equal highs / higher high
• RSI making lower high
• Suggests weakening momentum, possible short-term dip or sideways consolidation ahead.

MACD Divergence

• Observation:

Price is testing the previous high, but MACD histogram shows lower peaks compared to previous highs.

 Bearish Divergence:

• Price making equal / marginally higher high
• MACD line and histogram showing lower high
• Indicates momentum is not supporting the price rally strongly — possible caution at current levels.

Key Technical Levels

• Resistance: 25,050 – 25,100
• Support: 24,800 – 24,850
• Breakout Zone: Above 25,100 on strong volume, else risk of retest towards 24,800.

Summary

Trading Plan Idea

Intraday:
Sell near 25,050–25,100 with stop above 25,150 if RSI stays below the previous high.
Or, buy on dips near 24,850–24,800 with a stop below 24,750.

• Options:
• Short 25,100 CE if price stalls near highs.
• Or Bull Call Spread if price crosses and sustains 25,150.