Nifty RSI shows positive divergence; what it means? Analysts see 4% upside

A positive RSI divergence, in general, is considered a bullish technical signal. Tech analysts expect Nifty to target 23,800 levels on the upside.

The Nifty daily chart has shown an interesting development over the last couple of trading days. The Nifty 50 index registered a lower low at 22,471 on Monday, while one of its key momentum oscillators - the 14-day Relative Strength Index (RSI) made a higher-low compared to its nadir at 24.15 on March 13, 2026.  Today, the RSI thus far in trade has made a higher-high compared to its most recent high on the daily chart. In technical terms, this qualifies as a bullish RSI divergence.  Meanwhile, the Nifty thus far in trade on Wednesday has rallied 1.5 per cent or 350 points to 23,350 levels. 

 

 

 

What is RSI divergence, and what does it mean?

RSI divergence occurs when the price action and the momentum oscillator move in oppositive directions or to simply put behave differently. This generally indicates a potential trend reversal or weakened momentum of the prevailing trend.  In the case of a bullish RSI divergence, the chart shows the formation of higher highs and higher lows on the RSI while the main price action defers. Historical charts show this often acts as a lead indicator for a likely trend reversal or exhaustion of the existing trend.  Apart from that, analysts also highlight that the RSI has rebounded from oversold territory, which is also a potential indicator of a likely rebound. Earlier this month, the RSI had dipped below 30 - which is considered oversold - and now stands at 38.90 levels, shows the daily chart.

Nifty outlook: Analyst view

Tech analysts offer a mixed outlook on the Nifty, with a potential 4 per cent upside target in a bullish scenario.  Anand James, chief market strategist at Geojit Investments believes the Nifty could extend the up move toward 23,800 levels. This implies a near 4 per cent upside compared to the last close.  "The presence of continuation patterns encourages us to extend the upside objective to 23,350 - 23,800," said the analyst in Geojit's daily market report.    In case of dips, the analyst expects support for the Nifty around 22,880 levels, where buying interest could emerge; they caution that slippage below this level could signal a loss in momentum. The note highlights that the bullish outlook should hold as long as the Nifty remains above 22,640.  The above daily chart shows that the Nifty 20-day moving average (20-DMA) stands at 23,963, and seems to be slipping lower. The long-term 200-DMA stands at 25,255.  Brokerage firm Angel One cautions against getting overly bullish in the current market conditions.  "The recent technical pullback appears to be largely sentiment-driven, supported by optimism around potential de-escalation on the geopolitical front, thereby resembling a relief rally rather than a structural reversal," writes Angel One.  That said the brokerage believes that upside in the Nifty could be capped within the bearish gap zone around 23,380 - 23,620. In case of a down move it expects support for the index in the 22,600 - 22,500 zone.  Disclaimer: Views and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers' discretion is advised.