Bears Tighten Grip on Nifty and Nifty Bank

Indian equity markets faced heavy selling pressure as both Nifty and Nifty Bank extended losses, reinforcing bearish undertones. The sharp decline across key indices highlights renewed caution among traders as volatility picks up and support levels are tested.

Nifty: Gap Filled, Weakness Resurfaces

The Nifty 50 index ended at 24,712.05, down 1.02%, after opening at 24,899.50 and slipping to an intraday low of 24,689.60. The formation of a large bearish candle on the daily chart erased recent recovery attempts and confirmed the return of sellers at higher levels.

Technically, the index has filled the gap from August 18 and now trades slightly above the 100-SMA, while holding well above the 200-SMA. However, it remains below short-term moving averages — 9-EMA, 20-EMA, and 50-SMA — underscoring near-term weakness.

The Fibonacci retracement from April’s low of 21,743 to the recent high of 25,669 places the index back near the 23.6% retracement at 24,750. A breakdown could open room towards the 38.2% retracement at 24,170, if bearish momentum continues.

Momentum indicators confirm fading strength. The RSI slipped to 45, falling below its signal line, while the MACD remains positive but has narrowed, reflecting loss of bullish drive.

• Support: 24,600 (100-SMA), then 24,500
  
  
• Resistance: 24,900–25,000 zone
  
  

The India VIX jumped 3.66% to 12.19, signalling rising volatility expectations and caution in the near term.

Nifty Bank: Breakdown Extends, Support Levels Tested

The Nifty Bank index closed at 54,450.45, down 1.25%, forming a large bearish candle near its intraday low. The index broke below the midline of the Donchian Channel and is now testing the lower band, reinforcing the downside bias.

The failure of the recent swing low at 54,905 to hold has exposed the index to deeper levels at 54,000, with further risk towards 53,800. The index remains well below all major short-term moving averages, with only the 200-SMA providing broader support.

Momentum readings remain weak. The RSI dropped to 33, nearing oversold territory, while the MACD stays negative, reflecting sustained bearishness.

• Support: 54,000, followed by 53,800
  
  
• Resistance: 55,000
  
  

While oversold signals may trigger a mean reversion bounce, the broader setup still favours a sell-on-rise strategy until the index reclaims critical resistance levels.

Market Outlook

The market structure has weakened as Nifty hovers below short-term averages and Nifty Bank struggles to hold above swing supports. With rising volatility and sustained pressure from call writers at higher levels, traders should remain cautious.

Unless Nifty reclaims 25,000 and Nifty Bank crosses 55,000, the bias remains sideways-to-weak with downside risk intact. Pullbacks, if any, are better used to lighten positions or initiate fresh shorts until a decisive breakout emerges.