Technical View: Bearish momentum strengthens post-Budget; Nifty at 5-month low, 24,500 key support, Bank Nifty below major EMAs as VIX at 8-month high

Nifty outlook for February 2

• 25,000 likely to act as immediate resistance for Nifty 50
• 24,500 is seen as immediate support
• India VIX hits 8-month low

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The Nifty 50 hit a five-month low on February 1, decisively breaking below the recent consolidation range of 24,900–25,500 as bears tightened their grip on the market post the Union Budget. The pressure came after the Budget hiked the Securities Transaction Tax (STT) on futures and options premiums, even as it maintained the fiscal consolidation path, increased capex, and aimed to boost economic growth. With Sunday’s fall, the index slipped below all key moving averages, while momentum indicators weakened amid a spike in the India VIX.

Market participants were expecting the Nifty 50 to hold 24,900 (the previous week’s low), but that level failed to provide support. Given the prevailing bearish sentiment, if the index breaks the 24,500–24,300 zone — the next crucial support area — a sharp sell-off cannot be ruled out in the coming sessions. However, holding Sunday’s low of 24,572 could help stabilise the market and signal the formation of a new bottom, though confirmation is still required. In that case, 25,000 is expected to act as immediate resistance, followed by the 200-day EMA at 25,160, experts said.

The Nifty 50 opened flat and climbed to an intraday high of 25,441, but lost momentum after the Budget announcement and remained under selling pressure for the rest of the session. The index settled at 24,825, down 495 points (1.96 percent), forming a long bearish candle on the daily charts. The continuation of the lower highs–lower lows structure indicates a decisive breakdown of the crucial 25,000–24,900 support zone, which is not a positive sign for the market.

On a weekly basis, the index declined 0.89 percent, forming a bearish candle with long upper and lower shadows. It continued the lower top–lower bottom formation for the third consecutive week.

“Present weakness could be in line with the formation of a new lower bottom, which needs to be confirmed. The next lower supports to be watched are at 24,500–24,400, while immediate resistance is placed around 24,900–25,000 levels,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

Weekly options data suggest that 25,000 is likely to act as immediate resistance, while 24,500 is seen as immediate support. The maximum Call open interest was observed at the 25,400 strike, followed by 25,300 and 25,000, with the highest Call writing at 25,000, 25,400, and 25,300 strikes. On the Put side, the 24,500 strike held the maximum open interest, followed by 25,000 and 24,300, while the highest Put writing was seen at 24,100, 24,700, and 24,400 strikes.

Bank Nifty

The Bank Nifty mirrored the broader market weakness, plunging 1,193 points (2 percent) to close at 58,417, and forming a long red candle on the daily charts. The index closed decisively below its 10-, 20-, and 50-day EMAs, signalling a weakening short-term trend. However, it managed to hold the 100-day EMA and a key trendline support on a closing basis, which is a positive sign and could indicate the formation of a bottom in the coming sessions.

Momentum indicators also turned bearish, with the RSI declining to 41.16, while the MACD remained below the reference line with weakness visible in the histogram.

“Going forward, the 57,800–57,700 zone is expected to offer immediate support. A sustained move below 57,700 may intensify the downside and pave the way for further correction toward 57,200, followed by 56,500 in the short term,” said Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities.

On the upside, the 50-day EMA zone of 59,000–59,100 is expected to act as a crucial resistance area, he added.

Meanwhile, the India VIX, often referred to as the market’s fear gauge, spiked to 16.11 during the session before settling at 15.1, its highest closing level since June 4, 2025, marking a rise of 10.73 percent, which remains a major concern for bulls.