28 July 2025 : Nifty 50 Analysis: Head & Shoulders Breakdown or Bullish RSI Reversal?
Date: 27 July 2025
Nifty 50 is trading at a technical tipping point. After consistently failing to break the 25,260 resistance level, a visible Head & Shoulders (H&S) pattern has formed on the daily chart. With today’s price action hovering around 24,837 and heavy call writing in the 25,000–25,100 range, it becomes critical to evaluate whether a breakdown is imminent or if bullish RSI divergence might provide a bounce.
Technical Chart Analysis
- Pattern: Clear Head & Shoulders on Daily chart
- Neckline: 24,800 (currently testing)
- Head: 25,670 | Height: ~870 pts
- Possible Target after breakdown: 23,930
- RSI: Showing bullish divergence on both 1H and Daily charts
Moving Average Study
- Daily Chart: 20DMA near 25,240 is now a resistance, price is below 20, 50, and flattening 100DMA
- Hourly Chart: MA ribbon fully inverted; slope negative. Momentum trend weakening.
- Inference: Trend bias is clearly downward in short term. Only a sharp move above 24,900–25,000 can flip MAs back bullish.
Support and Resistance Table:
Level | Type | Strength |
---|---|---|
25,260 | Resistance (Head) | Very Strong |
25,000 | Resistance (Call OI) | Strong |
24,800 | Support (Neckline) | Critical |
24,400 | Fib Support | Medium |
23,800 | Measured H&S Target | Medium |
Option Chain Analysis (As of 27 July 2025)
Strike | Call OI | Put OI | IV (%) |
---|---|---|---|
24,800 | 46,765 | 68,726 | 10.32 |
24,900 | 86,159 | 50,805 | 11.12 |
25,000 | 1,12,980 | 45,337 | 13.67 |
25,100 | 1,45,952 | 38,969 | 15.12 |
25,200 | 58,634 | 33,447 | 15.48 |
H&S Pattern – What to Expect Before Breakdown?
- Lower highs already in place (Right shoulder at 25,200–25,260)
- Weak bounce attempts from 24,800 showing reduced buyer interest
- Rising red candle volume today = smart money prepping for breakdown
- If 24,800 breaks with volume, retest of neckline likely by Monday/Tuesday
- Target zone: 24,000–23,800
Strategy View: What Should Traders Do?
If price closes above 24,900, short-term bounce possible; consider Iron Condor or short PE with tight hedging.
Conclusion
Nifty is at a key technical zone. The Head & Shoulders neckline near 24,800 has been tested multiple times, and today’s price action shows signs of fatigue among bulls. However, the presence of bullish RSI divergence cannot be ignored, hinting at a possible pause or bounce. Max Pain at 24,900 adds weight to the theory of a Monday bounce, but caution is warranted below 24,800. Monitor volume carefully — breakdowns with confirmation tend to move fast.
Trade safe, manage your greeks, and respect the structure.
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