Nifty & Bank Nifty Lose Momentum: Key Levels to Watch Amid Bearish Pressure

The Indian stock markets ended the week on a cautious note, with both the Nifty and Bank Nifty indices facing selling pressure. After weeks of resilience, signs of fatigue have started to appear on the charts, and short-term indicators are hinting at a shift in momentum.

 Nifty Slides Below Key Support; Trend Turns Cautious

The Nifty 50 index closed the day at 24,968.40, marking a 0.57% loss and forming a second consecutive bearish candle on the daily chart. Over the week, the index slipped 0.72%, making it the third straight week of losses.

Importantly, Nifty has breached its 50-day Simple Moving Average (SMA) for the first time in several sessions — a sign that the short-term uptrend is losing steam. Adding to this, a bearish crossover between the 9-day and 20-day Exponential Moving Averages (EMAs) has occurred, which often precedes a potential downtrend.

 Fibonacci Analysis

A look at the Fibonacci retracement levels from the recent swing low of 24,473 to the peak of 25,667 shows that Nifty has fallen below the 50% retracement at 25,070. It now hovers just above the 61.8% support level at 24,928. A fall below this key mark could open the doors for a deeper correction towards the 78.6% level at 24,728, which becomes the next crucial support.

 Indicators Suggest Caution

• RSI (Relative Strength Index) has dipped to 43, remaining below the neutral zone of 50 — indicating weakness in momentum.
  
  
• The MACD (Moving Average Convergence Divergence) shows a growing divergence between the MACD and signal lines, suggesting continued bearish pressure.
  
  

Unless Nifty decisively climbs back above 25,240, it is likely that selling will dominate in the short term. Traders should adopt a sell-on-rise strategy instead of buying dips until a clearer reversal pattern emerges.

 Bank Nifty Falls Below Trendline: More Downsides Possible?

The Bank Nifty also faced strong selling pressure and closed at 56,283, falling by 0.96% for the day. It opened with a gap down and decisively broke below the rising trendline of the previously active wedge formation — an early sign of potential downside continuation.

On a weekly basis, the index dropped 0.83%, indicating a broader consolidation phase after multiple failed attempts to breach higher resistance levels.

 Key Technical Developments

• The index has now closed below both its 9-EMA and 20-EMA, signaling weakness in short-term momentum.
  
  
• Despite this, it still holds above its 50-day SMA, which now acts as an immediate support level. A break below this could accelerate the correction.
  

 Indicator Check

• The daily RSI has dropped to 45, showing a clear loss of bullish strength.
  
  
• On the weekly chart, however, RSI is at 61, implying that the broader trend remains intact, though short-term weakness is evident.
  
  
• The MACD has confirmed a bearish crossover on the daily timeframe.
  

 What to Watch Next?

A failure to reclaim 56,700 in the near term may invite more selling pressure. If the index breaches 55,700, a deeper decline could unfold.

Strategy Ahead: Shift to Caution

With both indices struggling to hold key moving averages and short-term indicators turning negative, market sentiment has shifted from neutral to cautious. Until a recovery above short-term resistance levels (25,240 for Nifty and 56,700 for Bank Nifty) is seen, a sell-on-rise approach may offer better risk-reward.