Nifty & Nifty Bank Technical Outlook: Breakdown Deepens, Short-Term Trend Turns Cautious

Nifty Market Outlook: Breakdown Below Trendline Raises Caution

The Nifty index extended its corrective phase, closing the session at 25,683.30, down 0.75%, as selling pressure intensified after the index failed to sustain above recent recovery levels. The benchmark decisively broke below the rising trendline drawn from the October lows, confirming a clear loss of short-term directional support. The daily chart printed a bearish candle, reinforcing the negative undertone.

On the weekly timeframe, Nifty formed a bearish engulfing pattern, shedding 2.45% over the week, a notable shift after the recent rally. Momentum indicators reflect growing weakness, with the daily RSI slipping below 40, highlighting fading bullish strength. The MACD has also moved into negative territory, further validating the short-term bearish bias.

From a moving average perspective, the index has slipped below its 50-day SMA, though it continues to trade above the 100-day SMA, offering some intermediate-term stability. However, Nifty has moved below its daily Supertrend, indicating that the near-term trend has turned cautious. Volatility remains elevated, with India VIX rising 3.07% to 10.92, pointing to wider intraday swings ahead.

Key Levels to Watch – Nifty

• Immediate Support: 25,600–25,550
• Resistance on Rallies: 25,900–26,000
• Trend Invalidated Above: 26,100

Any rebound toward the 25,900–26,000 zone is likely to attract selling pressure. As long as the index remains capped below 26,100, the sell-on-rallies strategy remains the preferred approach in the short term.

Nifty Bank Outlook: Momentum Cools After Rejection at Higher Levels

Nifty Bank also extended its corrective trend, closing at 59,251.55, down 0.73%. The daily chart formed a bearish candle near the upper Bollinger Band, indicating rejection from higher levels and confirming waning upside momentum.

Technically, the index has slipped below its 20-day SMA, while the 50-day SMA near 59,050 continues to act as an immediate support cushion. The daily Supertrend remains placed around 58,870, preserving the broader trend for now, although short-term momentum has clearly softened.

Momentum indicators echo this cautious setup. The daily RSI has cooled to around 48, slipping below the midline, while the MACD remains positive but with a flattening histogram, signalling a loss of upside traction.

On the weekly chart, Nifty Bank has formed a dark cloud cover pattern, with the index declining 1.50% over the week. This pattern highlights a shift in the short-term trend following the recent up-move.

Key Levels to Watch – Nifty Bank

• Immediate Support: 59,000–58,750
• Resistance Zone: 59,600–59,700

Holding above the 59,000–58,750 zone is critical to stabilise near-term price action. Failure to defend this band could invite deeper corrective pressure. On the upside, the 59,600–59,700 zone is expected to act as a strong supply area.

Overall Market View

The near-term tone across benchmarks has turned cautious, following rejection from higher levels and breakdowns below key short-term supports. While the broader trend has not fully reversed yet, the loss of momentum and bearish weekly patterns suggest that rallies are likely to be sold into until key resistance levels are reclaimed decisively.

Traders should remain selective, manage risk tightly, and avoid aggressive long positions until clear signs of strength re-emerge above critical resistance zones.