Nifty Breaches Major Supports; Short-Covering Unlikely to Reverse Bearish Tone

The Nifty index endured its steepest weekly decline in six months, erasing gains from the previous two weeks and closing beneath its prior low. This marked a sixth straight session of losses, with the benchmark unable to cross the previous day’s high or register a single positive close throughout the week — a clear reflection of persistent caution in the market.

Technical Breakdown

• The index has now slipped below key moving averages — the 20-, 50-, and 100-day EMAs — all of which align with the 0.618 Fibonacci retracement, creating a confluence of stiff resistance.
  
  
• Unless the index reclaims the 25,000 zone, every minor rebound is likely to attract fresh selling pressure.
  
  
• On the downside, a decisive breach below 24,550 could accelerate the corrective spiral further.
  
  

Friday’s session reinforced the bearish undertone as sellers maintained dominance. Successive lower closes and shifting resistance bands underline that sentiment remains tilted to the downside. Former support zones have now flipped into resistance, weakening the technical structure further.

The Nifty closed with heavy losses, tumbling 236.15 points to 24,654.70, just above its immediate support zone of 24,500–24,550, which also coincides with the 0.786 retracement of the recent rally. Resistance has now shifted lower to the 24,750–24,850 band.

Momentum Indicators

• RSI slipped below 40, confirming bearish momentum and leaving scope for further downside acceleration.
  
  
• The MACD remains negative, while histogram bars continue to contract.
  
  
• The technical structure suggests that every pullback is vulnerable to renewed selling.
  
  

Derivatives Snapshot

• Call writers remain in firm control, overshadowing put writers.
  
  
• Sharp open interest build-up of 1.90 crore contracts at the 25,000 strike has cemented this level as a formidable resistance ceiling.
  
  
• Significant put OI of 1.35 crore contracts at 24,500 signals this as immediate support.
  
  
• The Put-Call Ratio (PCR) slipped to 0.53 from 0.58, indicating a bearish bias. However, being close to oversold territory, intermittent short-covering rallies cannot be ruled out.
  

Volatility Check

The India VIX surged 5.96% to 11.42, signaling rising nervousness amid sharp intraday swings and global uncertainties. After reversing from historically low levels, traders appear to be building aggressive hedges, reflecting a risk-averse stance.

Market Outlook

The Nifty’s broader setup has turned fragile. Six straight sessions of losses, sustained trade below major moving averages, and a visible pattern of lower highs all confirm weakening sentiment.

• As long as the index remains capped below 24,700–24,800, sellers are expected to dominate.
  
  
• A decisive breakdown below 24,550 could open the path toward 24,300.
  
  
• Only a sustained reclaim of the 25,000 mark would restore stability and revive bullish momentum.
  
  

 The near-term bias remains sideways to bearish, with any rebounds likely to be short-lived unless backed by strong volume and a break above key resistance zones.