Nifty Lacks Direction as Market Breadth Continues to Weaken

Indian equity benchmarks ended the session on a subdued note, with the Nifty 50 failing to sustain early gains and drifting lower through the day. The index closed at 25,732.30, down 0.22%, reflecting continued selling pressure at higher levels and a lack of strong follow-through buying.

Nifty 50: Selling Pressure Persists at Higher Levels

Nifty opened on a positive note but gradually slipped lower, negating the previous session’s bullish candle. The index once again struggled to hold above the 25,820 zone, indicating persistent supply at higher levels.

From a technical perspective, Nifty remains below its 20-day and 50-day moving averages, keeping the short-term setup under pressure. Momentum indicators continue to weaken:

• RSI has slipped further toward the low-40s, pointing to fading strength after the recent rebound attempt.
• MACD remains in negative territory, with the histogram showing no meaningful improvement, suggesting the absence of bullish momentum.

Weak Market Breadth Signals Limited Participation

Market breadth continues to remain fragile. The net new highs–lows indicator stayed negative, highlighting the lack of broader market participation and reinforcing the cautious undertone in the market.

Volatility cooled marginally, with India VIX easing slightly but still hovering near the 11.19 mark. While this keeps intraday swings active, it has so far failed to support a sustained directional move.

Key Levels to Watch for Nifty

• Immediate support: 25,600–25,520
  A decisive breakdown below this zone could open the door for further downside.
• Immediate resistance: 25,850–25,900
  Any recovery toward this zone is likely to face selling pressure.

As long as Nifty remains capped below the 25,850–25,900 resistance band, the near-term outlook stays cautious, with rebounds expected to remain corrective rather than evolving into a trend reversal.

Nifty Bank: Recovery from Lows, but Momentum Still Lacking

The Nifty Bank index showed relative resilience, recovering from lower levels to close at 59,450.50, up 0.34% for the session. The index successfully defended its previous swing low, helping limit downside risk.

Technical Setup: Neutral, Not Yet Bullish

On the daily chart, Nifty Bank formed a hammer candle, signaling a firm rebound from the lower end of the recent trading range following the recent decline.

The index has managed to move:

• Above the mid Bollinger Band and the 20-day EMA, indicating short-term stabilization
• However, it remains below the 9-day EMA, suggesting the phase is still neutral rather than a clear resumption of the uptrend

Momentum indicators show tentative improvement:

• RSI has edged higher toward the 51–52 zone, reflecting mild recovery in momentum
• MACD continues to remain in negative territory, with only marginal improvement in the histogram

Support, Resistance & Sectoral Cues

On the hourly chart, the 59,300–59,100 zone remains a crucial support area. This band aligns closely with the 23.6% Fibonacci retracement, and as long as it holds, downside pressure is likely to stay contained.

Sectorally, PSU Banks outperformed, while Private Banks remained muted, keeping the overall recovery in the banking index measured.

• Key resistance: 59,800–59,900
  A decisive breakout above this zone is required to signal a return of bullish traction.
• Key support: 59,300–59,100

Until a clear move above resistance is seen, Nifty Bank is expected to remain range-bound, with limited upside participation.

Overall Market View

The broader market continues to struggle with weak breadth and lack of strong momentum. While Nifty Bank is showing signs of stabilization, Nifty remains under pressure below key moving averages. In the near term, traders should remain cautious, focusing on defined support and resistance zones, as the market appears more likely to consolidate rather than trend decisively.