The Nifty 50 rebounded on Tuesday after two consecutive sessions of losses, recovering from early volatility to close higher and form a short-term reversal candlestick pattern that traders are watching for confirmation above key technical levels. The benchmark index ended the session at 23,243, up 119.10 points or 0.52%, after a volatile trading day marked by sharp intraday swings.

The index opened on a positive note, gaining around 136 points initially, but quickly gave up early advances as selling pressure dragged it more than 150 points from the day’s high. However, renewed buying interest in the latter half of the session helped the index recover strongly, with banking and financial stocks leading the rebound and pushing prices closer to intraday highs by the close.

Market sentiment was supported by policy-related cues after the Reserve Bank of India allowed banks to raise overseas foreign-currency borrowings with a minimum maturity of three years at concessional swap rates. The move is seen as aimed at improving dollar liquidity and supporting credit flow, which lifted sentiment in rate-sensitive financial segments.

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From a technical perspective, Tuesday’s price action formed a hammer-like candlestick pattern with a long lower shadow, often interpreted as a sign that selling pressure may be easing after a decline. Analysts note that while this pattern suggests a potential bullish reversal, it requires confirmation through sustained follow-through buying in subsequent sessions.

Traders are now closely watching the 23,280 level, which is seen as an immediate trigger zone for validating the reversal setup. A decisive close above this mark could strengthen bullish momentum, while failure to sustain above it may keep the index range-bound in the near term.

On the upside, resistance is seen at 23,380, aligned with the eight-day exponential moving average, followed by stronger barriers at the 20-day moving average near 23,561 and the 50-day moving average around 23,699. Market participants expect continued volatility as the index attempts to establish direction after recent consolidation.

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