Selling Pressure Caps Nifty’s Gains; Bank Nifty Struggles Below Key Averages

1. Market Overview

Indian equities ended Tuesday’s session under sharp selling pressure, with both Nifty 50 and Nifty Bank swiftly reversing their early gains to close decisively in the red. Persistent, unyielding resistance at higher levels and deteriorating momentum indicators have forced market participants into a state of heightened caution.

2. Nifty 50 – Bearish Inverted Hammer Signals Caution

The Nifty slumped 0.40% to close at 24,487.40, wiping out previous gains and flashing fresh warning signals. The daily chart pattern formed a bearish inverted hammer, decisively revealing the market’s failure to hold intraday highs—an urgent sign of weakening strength.

Key Technical Highlights:

• Below 100-SMA: The index remains under the 100-day Simple Moving Average (SMA), with a widening gap from the 20-EMA. The SMA is a commonly used trend indicator based on the average closing price over the last 100 sessions.
• Momentum: The Relative Strength Index (RSI), currently below 40, suggests limited scope for deep pullbacks. A lower RSI typically means the index is losing strength and any upward moves might be shallow.
• Hourly Chart: Minor support exists at 24,370 based on the hourly supertrend, which is a dynamic indicator that signals potential short-term reversal levels.
• Trend Structure: Lower highs and lower lows persist, keeping the medium-term outlook cautious.

Support Levels: 24,370 → 24,300 → 24,200.

• Resistances: 24,660–24,700 is an important level, marked by the 23.6% Fibonacci retracement. This retracement is a technical method used to identify potential reversal levels based on prior price moves.

Trading View: Until a sustained close above 24,700, urgent caution is warranted—any upward move is likely to be met with immediate and strong selling pressure at resistance zones.

3. Bank Nifty – Reversal Fizzles Out

The Nifty Bank index plunged 0.84% to 55,043.70, abruptly snapping its recent recovery attempt. Early gains collapsed quickly as intense selling emerged near resistance, escalating concerns about further downside.

Key Technical Highlights:

• Positioning: Still below the 50-SMA, 20-SMA, and 9-EMA, which signal important average price levels over different periods. Remaining below these averages indicates continued short-term weakness.
• Critical Level: The 100-SMA near 55,000 is under urgent threat; a decisive break could rapidly trigger further downside and must be closely monitored.
• Momentum Indicators: The RSI is at 37 (near oversold, meaning the index may be undervalued), while the Moving Average Convergence Divergence (MACD) shows a negative crossover, which is a common indicator of downward trend continuation.
• Chart Pattern: Lower highs and lower lows intact on the hourly chart.

Support Levels: 54,700 → 54,450 (historical cushion).

• Resistance Level: 55,650 remains the key ceiling for recovery attempts.

Trading View: Continued weakness appears imminent unless the index closes above 55,650. Rallies will likely encounter swift resistance, underscoring the urgent need for defensive positioning.

4. Broader Market Sentiment

The selling pressure came despite relatively contained volatility:

• India VIX: Holding near 12.20, indicating no panic selling but steady caution.
• Derivatives Positioning: Call writers remain in control, especially at Nifty 24,600 and Bank Nifty 56,000 strikes, capping upside potential.

5. Outlook

Both Nifty and Bank Nifty face urgent technical weakness, with rallies aggressively sold at known resistance levels—the risk of further declines remains high.

• Short-term traders must act swiftly: range-bound and sell-on-rise strategies remain strongly favoured in this high-risk phase.
• For positional traders, watch with urgency for a confirmed breakout above Nifty 24,700 or Bank Nifty 55,650 as a signal for potential trend reversal. Patience and vigilance are essential.
• Investors can remain disciplined with Systematic Investment Plans (SIPs). SIPs involve investing a fixed amount regularly, helping investors benefit from long-term market resilience.