Nifty Slides for Fifth Straight Week: Key 24,500 Support Under Pressure as Bears Take Control

The Nifty 50 index has now lost ground for five weeks in a row, which is unusual and signals growing bearish sentiment. August started off weak, with the index dropping 203 points on Friday to close at 24,565.35, just above the important 24,500 support level.

Price Action: Breach of Key Levels

• The index continues to form lower highs and lower lows, underscoring the ongoing corrective phase.
• A decisive slip below 24,600 puts the spotlight on the make-or-break 24,500–24,550 support band, a region that has previously triggered rebounds. This time, however, there is no clear evidence of a reversal, keeping the market bias firmly negative.

Key Technical Observations:

• 100-DEMA breached: The index closed below its 100-day EMA for the first time in months, reflecting weakening trend strength.
• New Resistance: 24,750–24,800 now stands as a significant overhead supply zone.
• Next Support: A breakdown below 24,500 may open the door to 24,300–24,250.
• RSI below 40: This suggests poor momentum and a lack of buying strength.
• Short-covering missing: Without a sharp short-covering rally, the path of least resistance remains downward.

Derivatives Snapshot: Bears Firmly in Command

• Call writing at 25,000: Heavy call open interest at 25,000 makes it a formidable resistance.
• Put writing shifts lower: Traders are abandoning higher strikes, a clear bearish sign.
• Put-Call Ratio drops to 0.57: This is close to oversold territory but not enough to prompt a reversal.LevelCall OI (Resistance)Put OI (Support)25,000 CE1.01 crore contracts–24,200 PE–62.93 lakh contracts

Volatility Check: Calm Amidst the Storm

India VIX rose by 3.75% to 11.97 but remains well below panic levels. This subdued volatility suggests that while the market is weak, traders do not expect a sharp crash—indicating a likely scenario of a grinding correction or sideways consolidation.

Market Outlook: Sell-on-Rise Remains the Strategy

• The index is under clear bear control, with support zones weakening and buyer participation fading.
• Call writers are defending higher levels, while FPIs continue building short positions in index futures.
• Unless FPIs cover shorts and re-enter the cash market in a meaningful way, any bounce is likely to be met with selling pressure.

Strategy: In the current environment, rallies should be sold into rather than bought. A breakdown below 24,500 could accelerate the downside, while only a move above 24,800+ may bring temporary relief.

Conclusion

Nifty has been weak for a while, and with bearish signals from derivatives and poor momentum, caution is needed. A further drop is more likely than a rebound. Traders should stay cautious and consider short positions unless there is a clear sign of a reversal.