Technical View: Nifty falls for 7th day, selling pressure may continue if index breaks 24,600 support; Bank Nifty signals indecision after sharp fall

Nifty Outlook for September 30

The Nifty 50 continued its southward journey for the seventh consecutive session, closing moderately lower on September 29. However, it managed to defend the 24,600 level for another session ahead of the monthly F&O expiry scheduled for September 30. If the index can hold the 24,600-24,500 support zone, an upside toward 24,800-24,900 cannot be ruled out. However, there are doubts over the sustainability of this support zone, given the prevailing bearish sentiment. If the support zone breaks, the levels to watch are 24,400-24,300 (August low), according to experts.

The Nifty 50 opened higher at 24,729 and climbed up to 24,791 but could not sustain those gains for long. The index lost those gains and remained volatile for the remainder of the session, closing 20 points lower at 24,635 with above-average volumes.

The index formed a bearish candle with an upper shadow on the daily charts, indicating pressure at higher levels. It could not sustain above the 100-day EMA (24,750) and continued its lower high-lower low structure for the seventh straight session. The RSI dropped to 38.79, while the MACD maintained a negative crossover, with further weakness in the histogram.

According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, today's market action indicates an inability of bulls to sustain the bounce-back, signaling the possibility of more weakness in the coming sessions.

"Nifty is currently nearing an important support zone of around 24,500-24,400 levels, and this area could be reached in the next few sessions. However, any sustainable move above the hurdle of 24,800-24,900 levels could confirm a near-term bottom reversal pattern," he said.

The monthly options data indicated that the Nifty could remain in the 24,500-25,000 range in the short term.

The maximum Call open interest was placed at the 25,000 strike, followed by the 24,800 and 25,200 strikes, with the maximum Call writing at the 24,700, 24,750, and 24,800 strikes. Meanwhile, the 24,000 strike holds the maximum Put open interest, followed by the 24,600 and 24,500 strikes, with the maximum Put writing at the 24,000, 24,600, and 24,650 strikes.

Bank Nifty

The Bank Nifty outperformed the Nifty 50, rising 72 points to 54,461 with strong volumes after trading in a 460-point range. It formed a Doji candlestick pattern on the daily timeframe, indicating indecision among bulls and bears.

This pattern typically suggests a potential pause or reversal in trend, especially when it appears after a directional move.

"Looking ahead, the zone of 54,100–54,000 is expected to act as a key support area, and any breach below this range could invite further downside," said Sudeep Shah, Head of Technical Research and Derivatives at SBI Securities.

On the upside, the levels of 54,700–54,800 will serve as crucial resistance zones, and a sustained move above this band may open the door for a stronger recovery, he added.

Meanwhile, the India VIX, the fear gauge, was down by 0.53 percent to 11.37 and hovered around its 50-day EMA, signaling caution.

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