The weekly expiry session for the benchmark index proved highly challenging for market participants. Markets opened on a subdued note amid weak global cues and witnessed further pressure as a sharp sell-off across Asian equities dampened investor sentiment. The broad-based decline triggered sustained selling throughout the session, resulting in significant losses across sectors. Consequently, the Nifty 50 ended the day on a weak footing near the 23800 zone, shedding over 1.15% for the day.

The sharp market decline was primarily driven by global concerns, particularly the steep sell-off across major Asian markets and the strengthening of the Dollar Index. The Metal pack remained under significant pressure, while persistent weakness in IT stocks further exacerbated the downside momentum. As a result, broad-based selling emerged across the market, leading to a notable correction in benchmark indices.

From a technical perspective, the Nifty50 witnessed a strong correction, slipping below its 50-DEMA and entering the bullish gap created during the recent uptrend. This development signals a cautious near-term outlook. Structurally, although the index had earlier registered a higher high, the ongoing corrective phase and the formation of the next significant low are likely to determine the market’s directional bias in the sessions ahead.

On the levels front, the 20 DEMA around 23750, followed by the bullish gap of 23640 is likely to be seen as potential support zone and is likely to cushion the fall in intermediate period. On the flip side, 24000 mark is likely to act as an immediate resistance, while 24100-24150 remains a key hurdle. A sustained breakout above this level could only potentially trigger a fresh phase of bullish momentum.

Going ahead, we need to stay abreast of global developments as any aberrations are likely to impact on our domestic sentiments and hamper the near-term outlook. Simultaneously, with volatility expected to heighten, a disciplined risk management approach is advisable. Traders should avoid aggressive positioning and instead focus on selectively accumulating fundamentally strong stocks at lower levels to capitalize on potential medium term opportunities.

Key levels to watch

NIFTY

Support: 23750 – 23640

Resistance: 24000 – 24100

BANKNIFTY

Support: 56800 – 56100

Resistance: 57600 – 57900

Osho Krishan, Chief Manager – Technical & Derivative Research, Angel One