The Nifty 50 decisively broke below the 25,600 mark, coinciding with the midline of the Bollinger Band and the 20-day EMA (Exponential Moving Average), as bears tightened their grip on the market on November 6. Falling below short-term moving averages and weakening momentum indicators signaled further weakness ahead.
The next immediate support is placed at 25,450 (the September high, which can now act as support). A decisive fall below this level can open the door to 25,350–25,300, which converges with the falling long resistance trendline (acting as support), the 50-day EMA, and the 50 percent Fibonacci retracement of the recent rally. If the index breaks these levels, the 25,000 mark cannot be ruled out. On the higher side, 25,600–25,700 can act as a resistance zone, according to experts.
The Nifty 50 climbed above 25,600 in early trades but could not sustain and remained under pressure for most of the trading session. The index hit an intraday low of 25,492 in late trade before closing at 25,510, down 88 points, extending the downtrend for another session.
The index formed a bearish candle with an upper shadow on the daily charts, indicating selling pressure at higher levels. The lower high–lower low structure continued for the fifth consecutive session, especially after the double-top pattern formation near the 26,100 zone last week.
Momentum indicators weakened further, with the RSI falling below the neutral 50 mark to 49.76, while the MACD maintained a bearish crossover, with its histogram declining further.
“Momentum indicators and oscillators have turned bearish with a sell crossover, suggesting that short-term weakness is likely to persist and any pullbacks may attract selling pressure,” said Nilesh Jain, Head – Technical and Derivatives Research (Equity Research) at Centrum Broking.
On the upside, a move above 25,800 would be needed to negate the bearish setup, while immediate support is seen near 25,350, which corresponds to the 50 percent retracement level of the October series rally, he added.
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, also believes the underlying trend of the Nifty remains weak.
“The market is now entering a crucial support zone around 25,400 levels (the previously broken upside trendline resistance, as per the principle of change in polarity). Immediate resistance is placed at 25,700,” he said.
Weekly options data indicated that the Nifty may trade in the 25,000–26,000 range in the short term.
The maximum Call open interest (OI) was observed at the 26,000 strike, followed by 25,700 and 25,800 strikes, with the maximum Call writing at the 25,600, 25,700, and 25,800 strikes. On the other hand, the 25,000 strike holds the maximum Put open interest, followed by 25,200 and 25,500 strikes, with the maximum Put writing seen at 25,500, 25,400, and 25,000 strikes.
Bank Nifty
The Bank Nifty extended its decline for the second consecutive session and decisively broke the upward-sloping support trendline, signaling further weakness. The index dropped 273 points to close at 57,554 and formed a bearish candle with an upper shadow on the daily timeframe, indicating that bulls struggled to push prices higher as sellers remained active throughout the session.
The index reached close to the midline of the Bollinger Band (57,480) and the 20-day EMA (57,400); breaking both levels could put bears in a dominant position.
“Going ahead, the 20-day EMA zone will act as immediate support for the index. Any sustained move below 57,400–57,300 will likely lead to further correction up to the 56,800 level. On the upside, the 57,900–58,000 zone will act as a crucial hurdle,” said Sudeep Shah, Head – Technical Research and Derivatives at SBI Securities.
Meanwhile, the India VIX, the volatility or “fear” index, corrected nearly 2 percent to 12.41, though it attempted to move near the 13 zone intraday. The index remained above all key moving averages (except the 200 DEMA), still signaling some caution for the bulls.
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