Technical View: Bears could strengthen if Nifty breaks Budget-Day low; US-Iran Tensions lift VIX to 9-month high, 59,000 crucial for continued Bank Nifty weakness

Nifty outlook for March 4

• Nifty 50 likely to trade in 24,500–25,000 range in short term
• Bears could strengthen if Nifty breaks Budget-Day low
• US-Iran Tensions lift VIX to 9-month high
• 59,000 crucial for continued Bank Nifty weakness

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The Nifty 50 was caught in a bear trap, falling 2.2 percent intraday to move closer to the Union Budget day’s low (near 24,600), as escalating geopolitical tensions between the US and Iran weighed heavily on global sentiment. The index dropped well below the lower Bollinger Bands as well as the 200-day EMA, with momentum indicators signalling a severely bearish trend. However, there was a recovery of more than 250 points from the day’s low.

The 24,600 level is expected to be at major risk, considering the VIX has risen to a nine-month high amid ongoing Middle East tensions. A decisive fall below this level could strengthen the bears, potentially dragging the benchmark index toward the August 2025 low of 24,300. However, in case of further recovery, 25,000 is expected to act as the immediate crucial resistance, followed by the 25,100 and 25,250 levels, according to experts.

The Nifty 50 opened at 24,659 with a loss of more than 2 percent but immediately rebounded to near 25,000. After an hour of volatility, the index succumbed to selling pressure again and touched an intraday low of 24,603 in the afternoon. In the last one-and-a-half hours of trade, it witnessed a healthy recovery and closed at 24,866, down 313 points (1.24 percent).

The index formed a bullish candle on the daily charts due to the recovery but needs to fill the bearish gap for bulls to regain control. Until then, consolidation with a bearish bias is likely to prevail.

“Finding support near the Budget-day low may be hinting at a possible triple-bottom formation. Key support is placed at 24,600; a decisive break below this level could extend the decline toward 24,200,” said Nilesh Jain, VP – Head of Technical and Derivative Research at Centrum Finverse.

According to him, immediate resistance is seen at 25,000, and a break above this level could trigger short covering toward the 25,200 mark.

Rupak De, Senior Technical Analyst at LKP Securities, also agreed with Nilesh Jain, saying that unless the Nifty sustains above 25,000, overall sentiment is likely to remain tilted in favour of the bears.

Momentum indicators and oscillators have already flashed a sell crossover, indicating a weak underlying tone. The RSI declined to 35.48, while the MACD remained well below the zero line, with further downside visible in the histogram.

Meanwhile, the fear gauge, India VIX, spiked 25.01 percent on Monday to 17.13, the highest closing level since June 2, 2025, signalling major risk for bulls. Any further increase could add more pressure on the market.

The market will remain shut on March 3 for Holi.

Weekly options data suggested that the Nifty 50 is likely to trade in the 24,500–25,000 range in the short term, as a breakout from this range could provide firm directional cues on either side.

The maximum Call open interest was placed at the 25,500 strike, followed by the 25,000 and 25,300 strikes, with the maximum Call writing seen at the 25,000, 25,500, and 24,900 strikes. On the Put side, the 24,500 strike held the maximum Put open interest, followed by the 24,800 strike, with the maximum Put writing at the 24,500, 24,800, and 25,000 strikes.

Bank Nifty

The banking index also showed a smart recovery of nearly 700 points, or over 1 percent, from the day’s low of 59,148 to close with a loss of 689 points (1.14 percent) at 59,840 after a sharp gap-down opening. This indicates that it recouped nearly half of the day’s losses and climbed back above the 50 percent Fibonacci retracement level (of the rally from 57,783 to 61,765). It also defended the falling trendline on a closing basis but failed to move back above the 50-day EMA.

With this move, the Bank Nifty is now trading below its short- and medium-term moving averages, although it took support at the 100-day EMA (59,060) intraday.

Momentum remains in favour of the bears, as the RSI dropped to 44.06 and the MACD maintained a bearish crossover, with a further decline in the histogram.

“The Bank Nifty index found support near its 100-day EMA, which triggered a steady rebound through the session. Going forward, the support zone of 59,400–59,300 will be crucial for the index. A sustained move below 59,300 may accelerate the decline toward 58,800, followed by 58,300,” said Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities.

According to him, on the upside, the 60,300–60,400 region will act as the immediate hurdle. A decisive move above 60,400 will be essential for the index to regain momentum.