Technical View: Nifty’s 23,700 support at risk amid US–Iran tensions; Bank Nifty falls over 2%, 55,300 crucial as VIX jumps 11%

Nifty outlook for March 12

• Nifty moves closer to death cross
• India VIX spikes 11.41% to 21.06, keeping bulls at risk
• Monday's low near 55,300 expected to be at risk for Bank Nifty

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The Nifty 50 failed to see follow-through buying interest as global weakness amid the ongoing US–Iran conflict lifted risk-off sentiment, highlighting the continued dominance of bears over bulls. Elevated oil prices and a choking supply of natural gas sent the index down over 1.6 percent on March 11 as selling pressure was seen across sectors, with India VIX spiking again.

With the erasure of all the previous day's gains, the 23,700 support (Monday's low formed after a big gap-down opening) is now expected to be at major risk. Below this, 23,500 is the level to watch. However, the hurdle on the higher side is placed at 24,000–24,050. Even the gap between the 50-day EMA and the 200-day EMA has been narrowing. If the former crosses the latter on the downside — generally known as a death cross in technical terms — further bloodbath cannot be ruled out, experts said.

The Nifty 50 opened lower and remained under pressure throughout the session. It touched an intraday low of 23,834 before closing at 23,867, down 395 points (1.63 percent), and formed a sizeable bearish candle, indicating strong selling pressure at higher levels.

Momentum indicators further supported the negative bias. The RSI remains in a falling trajectory and is currently placed near 30, reflecting weak momentum. Meanwhile, a rising ADX signals strengthening bearish trend intensity, and the MACD remains well below the zero line with a long red bar in the histogram, reinforcing the prevailing downside bias. The Stochastic RSI sustained in the oversold zone.

"An already weak technical chart extended its weakness, as the positive gap between the 50 and 200 moving averages appears to be narrowing, heightening the risk of a death cross. If this happens, further rounds of selling pressure could emerge, potentially pushing the Nifty significantly lower," Rupak De, Senior Technical Analyst at LKP Securities, said.

According to him, supports are placed at 23,700 and 23,300, while on the higher end, resistance is placed at 24,100.

Meanwhile, India VIX, the fear gauge, spiked 11.41 percent to 21.06, keeping the bulls at risk. It needs to fall sharply for the bulls to enter a comfort zone.

The weekly options data indicated that 23,500, which has the maximum Put open interest, is expected to act as support for the Nifty 50, while resistance is placed in the 24,000–24,300 range, which holds the maximum Call open interest.

Bank Nifty

The banking index was hit quite hard, falling 1,215 points (2.13 percent) to 55,736 and forming a long bearish candle on the daily timeframe, with sell signals from momentum indicators, indicating bears maintaining a strong presence. Hence, Monday's low near 55,300 is now expected to be at risk.

The RSI remained in the oversold zone, falling to 28.74, while the MACD sustained below the reference and zero lines with a widening red bar in the histogram. All this indicates continued bearish momentum.

"The immediate support is placed in the 55,400–55,300 zone. Any sustainable move below this zone could result in Bank Nifty extending its weakness towards 54,900, followed by 54,500 in the short term," Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, said.

On the upside, the 56,100–56,200 zone is likely to act as a strong resistance, he added.