Technical View: Bears tighten grip as Nifty slips below 100 DEMA, raising chances of August low retest; Bank Nifty eyes 200 DEMA

Nifty outlook for August 29

The selling pressure widened with the Nifty 50 decisively falling below the 100-day EMA (24,632) on August 28, the monthly F&O expiry session, as bears are not allowing the bulls to take charge of the equity markets. The pessimism persisted following the implementation of US tariffs on Indian goods.

Technical and momentum indicators are also weakening further, with the RSI falling to 40.79 and the MACD on the verge of a bearish crossover. The momentum faded further in the histogram. Given the negative sentiment, bears may target 24,400 (the upward-sloping support trendline), followed by the August low of 24,340 and the 200-day EMA at 24,270 — the crucial support level. A breach below this could give more strength to the bears. On the upside, 24,600–24,700 (near the 100-day EMA and Thursday's high) are the levels to watch, according to experts.

The Nifty 50 attempted to hit the previous day's close in the morning but failed, remaining under pressure throughout the session. It finished the session at 24,501, down 211 points (0.85 percent), and formed a bearish candle on the daily charts with above-average volumes, indicating a continuation of the downtrend.

Furthermore, the crucial support of the previous upside opening gap from August 18 was decisively broken on the downside at 24,670. Another support — the ascending trendline connecting the April to August 25 bottom — has also been broken. "This is not a good sign," said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

According to him, the underlying trend of the Nifty continues to be negative, and more weakness could be in store in the short term.

“The next lower supports to be watched are around 24,300–24,250 (previous swing lows and the 200-day EMA). Any pullback could find strong resistance around the 24,700 level,” he said.

The weekly options data suggested that 24,000 is expected to be a crucial support for the Nifty 50, with resistance at 24,700–24,800 levels.

The maximum Put open interest was placed at the 24,000 strike, followed by the 24,500 and 24,200 strikes. The 25,000 strike holds the maximum Call open interest, followed by 24,800 and 25,100 strikes.

The maximum Call writing was observed at the 25,000 strike, followed by 24,800 and 24,600 strikes. The maximum Put writing was seen at the 24,000 strike, followed by 24,500 and 24,200 strikes.

Bank Nifty

The banking benchmark index, Bank Nifty, corrected more than the Nifty 50 for another session, sinking 630 points (1.16 percent) to 53,820, and forming a bearish candle on the daily timeframe with a continuing lower highs–lower lows structure and above-average volumes.

Now, the next crucial support lies at the 200-day EMA (53,570). A decisive break below this level could open the door for a deeper correction, given the weakness in momentum indicators.

From its recent peak of 56,156, the index has corrected by more than 2,300 points in just 8 sessions, highlighting the strong selling pressure in the banking space.

“A sustained move below the 53,500 mark could accelerate downside momentum, paving the way for a further decline towards 52,900, followed by 52,400 in the short term,” said Sudeep Shah, Head – Technical Research and Derivatives at SBI Securities.

On the flip side, he added, “The 54,500–54,600 zone will act as a key hurdle. Only a decisive move above this band would indicate signs of recovery and provide some respite to the bulls.”

Meanwhile, the India VIX, which measures expected market volatility, sustained above short-term moving averages and briefly climbed above the 13 mark intraday. However, it fell 0.12 percent to 12.18, indicating that volatility remains elevated a bit, though not surging.