The new week began on a concerning note, as selling pressure continued after the late weakness witnessed before the previous week’s close. Starting the session on a muted note, buyers initially attempted to hold ground, but their efforts gradually faded as selling pressure spread across the broader markets. The index quickly declined by over 100 points before finding some stability near a crucial anchor point from the recent lows. Thereafter, prices moved sideways for the remainder of the session, eventually wrapping up the day at the 23946 mark, registering losses of 0.46%.

With prices struggling to secure a convincing close above the 24200 mark, the technical structure, which had turned constructive last week, has now shifted towards a more cautious stance. That said, prices continue to remain above key short-term moving averages, namely the 20 and 50 DEMA. Unless the index witnesses a decisive close below these moving averages, it would be prudent to avoid aggressive short positions at this stage. The 20 and 50 DEMA are currently aligned in the 23850–23800 band, which is likely to act as an immediate support zone in case selling pressure intensifies further. At this juncture, it is important to highlight the increasing underperformance in the MIDCAP space, which has witnessed selling pressure in 4 out of the last 5 trading sessions. On the daily 0.25% × 3 Point & Figure chart of the Midcap index, a retest of a bearish 100% High Pole formation is currently underway. Unless the index manages to reclaim and break above its recent highs, the developing technical structure remains a cause for concern and adds to the cautious outlook for the NIFTY 50. In terms of levels, the 24150-24200 band remains an immediate resistance zone, along with the support zones mentioned above.

While the frontline indices continue to lack clear directional momentum, stocks that witnessed remarkable moves in the previous week appear to be entering a phase of consolidation and taking a breather. At this juncture, it is advisable to adopt a wait-and-watch approach until further directional clarity emerges across both frontline and broader market indices.

Key levels to watch

NIFTY

Support: 23850 – 23800

Resistance: 24100- 24175

BANKNIFTY

Support: 57250 – 57100

Resistance: 58300 – 58750

Hitesh Rathi, Technical Analyst -Equity & Derivatives, Angel One.