Technical View: Selling pressure could intensify if Nifty breaks key support of 24,500, 54,400 crucial for Bank Nifty

Nifty Down

The Nifty 50 has decisively broken its two-day consolidation and fell by 1 percent on May 20, forming a long bearish candlestick pattern on the daily charts, signaling weakness. The crucial support now lies in the 24,500–24,400 zone. If the index falls and sustains below this level, selling pressure may intensify. On the higher side, the 25,000–25,100 zone may act as a hurdle, experts said.

The Nifty 50 extended its weakness as the session progressed, hitting a day’s low of 24,670 in late trade. It closed at 24,684, down 262 points (1.05 percent), near the 10-day EMA.

Technically, today’s market action signals the presence of a strong hurdle at the 25,100 level, according to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

Despite the correction, the bullish chart pattern of higher tops and bottoms remains intact. The current weakness is expected to form a new higher bottom in the pattern soon, he believes.

In the near term, the market appears to be undergoing a downward correction from recent highs, and more weakness is expected in the coming sessions. "The next lower support to watch is the 20-day EMA around 24,450 levels. Immediate resistance is placed at 24,915," he said.

The weekly options data suggests that the index may trade in the 24,500–25,000 range in the short term. The maximum Call open interest is at the 25,000 strike, followed by the 25,500 strike, with maximum Call writing at the 25,000 strike, and then at the 24,800 and 24,900 strikes. On the Put side, the 24,000 strike holds the maximum open interest, followed by the 24,500 and 24,700 strikes, with maximum Put writing at the 24,500 strike, followed by the 24,300 and 24,000 strikes.

Bank Nifty

The Bank Nifty also came under pressure, falling 543 points or 1 percent to 54,877, and formed a bearish candle on the daily timeframe. The index has broken below the 10-day EMA, with immediate supports at 54,519 (20-day EMA) and 54,442 (swing low).

"After a rejection candle yesterday, Bank Nifty gave a follow-through move to the downside and is now heading toward the daily swing low of 54,442 — the logical target for bears. Intraday selling volumes were higher compared to up candles, signaling clear long liquidation and fresh short additions," said Anshul Jain, Head of Research at Lakshmishree Investments.

According to him, the bearish structure remains intact, and any rally toward the 55,100–55,300 zone should be viewed as an opportunity to initiate fresh shorts with a tight stop.

Meanwhile, the India VIX, the fear gauge, remained elevated above the 17 zone (at 17.39, up 0.17 percent), signaling caution for bulls.