The Nifty 50 faced persistent selling pressure during the monthly F&O expiry week, decisively breaking 24,900, which coincided not only with the 50 DEMA but also with the 50% retracement of the recent rally (24,400-25,450) on September 25. Bears maintained tight control over the market for the fifth consecutive session.
Furthermore, the index fell below the midline of the Bollinger Bands on both the daily and weekly charts, although it marginally managed to defend the 10-week EMA on a closing basis.
Momentum indicators also signalled weakness. The RSI dropped below the 50 level, at 46.2, with a bearish crossover, while the MACD gave a negative crossover with the histogram turning weak on the daily charts. On the weekly scale, the MACD continued to maintain a negative crossover, with the histogram staying below the zero line since August. The RSI also reported a bearish crossover this week.
Thus, 24,800 is immediate support for the index (61.8% Fibonacci retracement of the recent rally), followed by 24,700 (20-week EMA) and 24,600 (78.6% retracement). However, 25,000-25,100 are expected to act as immediate resistance levels, experts say.
The Nifty 50 opened lower and remained under pressure throughout the session, falling 166 points (0.66%) to close at 24,891, with above-average volumes. It formed a long bearish candle with an upper shadow on the daily charts, signalling strong downside momentum. The lower high-lower low structure persisted for the fifth consecutive session.
"Nifty is now at a critical point, potentially moving below the cluster support around the 24,900 level (ascending trendline and 10-week EMA). This is not a good sign," said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.
According to him, the underlying trend of Nifty remains weak. "A sharp move below 24,900 could open further weakness, potentially down to 24,700-24,600 levels in the near term. Any sustainable bounce above 25,100 is likely to confirm a near-term bottom reversal in the market," he added.
The monthly options data suggests that Nifty 50 may find immediate support at 24,800, followed by 24,500, with resistance on the higher side at 25,000-25,100.
The maximum Call open interest is seen at the 25,000 strike, followed by the 25,100 and 25,500 strikes. The maximum Call writing is at the 25,000, 25,100, and 25,050 strikes, while the 25,000 strike also holds the maximum Put open interest, followed by the 24,900 and 24,500 strikes. The maximum Put writing is at the 24,900, 24,800, and 24,200 strikes.
Bank Nifty
The Bank Nifty showed relative outperformance compared to the Nifty 50, but ultimately corrected and fell below 55,000 (20-day EMA), declining by 145 points to 54,976. It formed a bearish candle with a long upper shadow on the daily timeframe, indicating selling pressure at higher levels.
This suggests that despite intraday attempts to move higher, sellers dominated the session, pushing prices lower by the close.
Adding to the cautious tone, the daily RSI also dropped below the 50 mark, reinforcing the view that momentum is weakening. A falling RSI below 50 (currently at 48.78) often reflects a shift in sentiment from bullish to neutral or bearish.
"The zone of 54,500-54,400 will act as crucial support for the index, while on the upside, the zone of 55,300-55,400 will act as an important hurdle," said Sudeep Shah, Head - Technical Research and Derivatives at SBI Securities.
Meanwhile, the India VIX, the fear index, climbed above short-term moving averages as well as the midline of the Bollinger Bands, signalling discomfort for bulls. The VIX rose 2.47 percent to 10.78.
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