Technical View: Bears to target psychological support if Nifty breaks below 24,300 amid Iran war; Bank Nifty falls 1,084 points as VIX hits 10-month high

Nifty outlook for March 5

• Bears to target psychological support if Nifty breaks below 24,300 amid Iran war
• Bank Nifty falls 1,084 points as VIX hits 10-month high
• Nifty resistance is placed at 24,600

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Bears remained aggressive and showed no signs of relinquishing control to the bulls, dragging the Nifty 50 to a 10-month low amid deepening Middle East tensions, with Israeli forces launching fresh attacks on Tehran, the capital of Iran. The benchmark index fell 1.55 percent amid broad-based selling across sectors, barring IT.

Continuing risk-off sentiment, a spike in the VIX, weakening momentum, and deteriorating technical indicators suggest that the bears’ dominance may not end anytime soon and could drag the Nifty 50 down to the 24,050–24,000 zone (the 50 percent Fibonacci retracement of the April 2025 low to the January 2026 high, and a key psychological support level) if Wednesday’s low of 24,300 is broken in the upcoming sessions. However, resistance is placed at 24,600, according to experts.

The Nifty 50 opened 477 points lower at 24,389 and tested an intraday low of 24,305 amid volatile trade. The index witnessed buying interest in the last hour of the session and climbed to an intraday high of 24,602. The opening downside gap was partially filled, and the Nifty closed well off the day’s lows, down 385 points (1.55 percent) at 24,480.

The index formed a bullish candle with upper and lower shadows on the daily charts after a gap-down opening, indicating sharp selling pressure along with intraday volatility. Meaningful upside recoveries have been seen after sharp gap-down openings in the last couple of sessions, which may indicate attempts by bulls to stage a relief rally.

According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, the underlying trend of the Nifty remains weak amid global geopolitical tensions.

“Nifty is currently sliding towards an important support zone of 24,300–24,100 (previous important swing lows and the unfilled gap of May 12). Hence, there is a higher possibility of a reasonable upside bounce from the lows in the near term,” he said, adding that immediate resistance is placed at 24,600.

Meanwhile, the fear index, India VIX, spiked 23.41 percent to 21.14 — the highest closing level since May 9, 2025 — signalling rising uncertainty and discomfort in the bulls’ camp. The VIX extended its sharp uptrend for the third consecutive session.

Weekly options data suggest that the Nifty 50 is likely to trade in a broad range between 24,000 (where the maximum Put open interest is placed) and 25,000 (which has the maximum Call open interest) in the short term.

Bank Nifty

The Bank Nifty underperformed the benchmark Nifty 50, plunging 1,084 points (1.81 percent) to close at 58,755 after another gap-down opening at 58,447, extending its downtrend for the third straight session. The banking index formed a bullish candle with an upper shadow on the daily charts, indicating buying interest at lower levels.

The index decisively broke its 100-day EMA support on Wednesday. However, the 78.6 percent Fibonacci retracement support at 58,630 (from the February low to high) was tested intraday but held on a closing basis.

Notably, with today’s move, Bank Nifty has fully filled the 1,106-point gap that was created on February 3 following the India-US trade deal announcement. The index is now 972 points away from the February low and 1,343 points below its 200-day EMA.

“The immediate support is placed in the 58,200–58,100 zone. Any sustainable move below this zone could result in Bank Nifty extending its weakness towards 57,700, followed by 57,300 in the short term,” said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.

On the upside, the 59,200–59,300 zone is likely to act as immediate resistance, he added.