Technical View: Bears pull Nifty to two-month low; more downside if 20-WMA breaks decisively; Bank Nifty below short-term averages as VIX rises

Nifty Outlook for January 12

• Nifty loses 700 pts from record high this week, hits two-month low
• Bears to get charged more if 20-WMA breaks decisively
• Momentum, Technical indicators maintain sell crossovers
• Key Resistance at 25,900-26,000, Immediate Key Support at 25,600
• Bank Nifty slips below short-term averages, signalling bearish sentiment
• India VIX jumps to one-month high

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The Nifty 50 has seen persistent selling pressure, losing 700 points from its record high seen at the start of the current week and nearly 200 points on January 9, as bears charged further, accompanied by high volumes amid Trump tariff concerns. The Bank Nifty, which was outperforming the Nifty 50, also seems to have entered a bearish phase as it fell below short-term moving averages and the midline of the Bollinger Bands, while the VIX reached a one-month high.

After initial volatility, the Nifty 50 gained bearish momentum and extended its downtrend as the day progressed, hitting a day’s low of 25,623 (which is marginally above the 100-day EMA at 25,618) before closing 194 points (0.75 percent) lower at 25,683, the lowest closing level since November 10, 2025. The index formed a long red candle for another session and closed below the lower Bollinger Band, continuing its correction throughout the week, which resulted in a weekly loss of 645 points (2.45 percent).

If the index sustains below 25,700, the 25,580 level (20-week SMA) is the immediate support to watch, followed by the crucial support zone of 25,400–25,300. On the higher side, 25,900–26,000 is expected to act as a resistance area, experts said.

The momentum indicators have already generated sell crossovers on both the daily and weekly timeframes. The RSI fell below 40 to 38.55, while the MACD remained below the reference line with a further weakening histogram on the daily charts. On the weekly scale, the RSI dropped to 53.16 and fell below the signal line, while the MACD also moderately turned bearish this week, with the histogram declining below the zero line for the first time since the October 6–10 week. All this indicates the strong presence of bears.

“A long bear candle was formed on the weekly chart, which signals a sharp reversal in the market after the consolidation movement of the past few weeks. This is not a good sign and indicates more weakness in the coming week,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

According to him, the underlying trend of the Nifty continues to remain weak. “A slide below the support of 25,700 could open further decline down to 25,400 in the coming week. Immediate resistance is placed at 25,900,” he said.

The weekly options data suggested that 25,500 is expected to act as a crucial support, with strong resistance at 26,000.

On the Call side, the 26,000 strike holds the maximum Call open interest, followed by the 26,100 and 26,200 strikes, with maximum Call writing seen at the 25,800, 25,900, and 26,000 strikes. Meanwhile, the maximum Put open interest was placed at the 25,500 strike, followed by the 25,700 and 25,600 strikes, with maximum Put writing at the 25,400, 25,200, and 25,650 strikes.

Bank Nifty

The Bank Nifty slipped into bearish momentum as it decisively fell not only below short-term moving averages and the midline of the Bollinger Bands but also below the 50 percent Fibonacci retracement level (of the recent rally from the December low to the record high of January), consistently accompanied by above-average volumes.

The banking index corrected 435 points (0.73 percent) to 59,252 and formed a bearish candle with minor upper and lower shadows on the daily charts. It shed 899 points (1.5 percent) for the week amid above-average volumes and reported a long red candle on the weekly timeframe.

The momentum indicators on the daily scale turned bearish, with the RSI falling to 47.96 and the MACD slipping below the reference line, with the histogram turning red. The DI– is on the verge of crossing above DI+. If this crossover materializes, it would indicate that selling pressure is overtaking buying interest, increasing the risk of a deeper pullback in banking stocks.

“Going ahead, for Bank Nifty, the rising trendline zone of 59,100–59,000 will act as immediate support. Any sustained move below the 59,000 level could lead to the index extending its weakness further down towards the 58,500 level,” said Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities.

On the upside, the zone of 59,500–59,600 will act as an immediate resistance, he added.

Meanwhile, the fear index, India VIX, jumped 3.07 percent to 10.93 and extended its upward journey for the second consecutive session, surpassing the medium-term moving average, which signaled increasing caution for bulls. Discomfort may increase further if the VIX hits long-term moving averages.