28 July 2025 : Nifty 50 Analysis: Head & Shoulders Breakdown or Bullish RSI Reversal?

Nifty 50 analysis showing Head and Shoulders pattern near 24,800. Option chain insights, max pain, RSI divergence, and moving average signals.
Nifty Analysis: Is Head & Shoulders Signaling Breakdown? | viecapital

Date: 27 July 2025

Author: Praveen Kumar (@viecapital)

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.

Nifty 50 hourly chart highlighting descending channel, multiple RSI bullish divergences, and support test near 24,800 level with visible price consolidation around lower trendline support zone.

 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.
Nifty 50 daily chart showing Head and Shoulders pattern with neckline at 24,800, Fibonacci retracement levels marked from 21,756 to 25,670, RSI indicator showing bullish divergence, and support levels at 24,400 and 23,800.


Support and Resistance Table:

LevelTypeStrength
25,260Resistance (Head)Very Strong
25,000Resistance (Call OI)Strong
24,800Support (Neckline)Critical
24,400Fib SupportMedium
23,800Measured H&S TargetMedium

Option Chain Analysis (As of 27 July 2025)

Max Pain Point: 24,900
Put Writers’ Base: 24,800 (OI: 68,726)
Call Writers’ Strongest Base: 25,000 (OI: 1,12,980), 25,100 (OI: 1,45,952)

StrikeCall OIPut OIIV (%)
24,80046,76568,72610.32
24,90086,15950,80511.12
25,0001,12,98045,33713.67
25,1001,45,95238,96915.12
25,20058,63433,44715.48

 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.

If price closes below 24,800 with volume, shift to bearish bias. Bear Put Spread or Directional PE Buy advisable.

In trending breakdown, avoid Condors and move to vertical spreads.

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 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.

Follow me on X for real-time updates: @viecapital

I’m Praveen Kumar, a seasoned Technical Analyst and stock market trader with over 25 years of experience in the Indian equity and derivatives markets. My passion for numbers and patterns led me to a dual career as a Mathematics Teacher and market technician. I specialize in Technical Analysis, with deep expertise in Elliott Wave Theory, derivatives strategies, and market forecasting. Over the years, my analysis and market views have been featured on NDTV Profit as a financial guest, along with published articles on reputed financial web portals, sharing insights on Nifty 50, Bank Nifty, and stock market trends. As a trader and analyst, I focus on interpreting price action, chart patterns, wave counts, and technical indicators to deliver precise market levels and actionable trade ideas. My approach blends classical charting with modern analysis tools to help traders navigate market volatility. Through VieCapital, I aim to share daily market analysis, trading strategies, and educatio…
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