NIFTY had a weak session of trade, as sellers extended the ongoing decline. Following a gap-down opening, selling pressure persisted through the initial part of the session, resulting in the index declining over 150 points in early trade. Although prices stabilized briefly thereafter, another bout of selling towards the fag end of the session resulted in a further decline of around 60–70 points. The index eventually wrapped up the session at 24090, with losses of 0.48%.

The technical structure is becoming increasingly cautious and warrants a careful approach at this juncture. Prices have repeatedly failed to sustain higher levels above the 20 DEMA, with this persistent inability to hold gains pointing towards an increasing grip of sellers over the price action. That said, prices are now tentatively positioned near a crucial rising trendline, which has acted as a strong support on multiple occasions since June this year. The sustainability of this trendline will therefore be important in determining the near-term direction of the index. A similar setup is emerging on the Point & Figure charts, where prices are on the verge of a bearish breakdown on a closing basis below the 24075 mark. A decisive break below this level is likely to accelerate the ongoing weakness and trigger a correction, initially towards the recent swing lows in the 23650–23600 zone. In terms of levels, while immediate support is placed in the 24050-24000 band, a stronger support can be found in the 23850-23800 band. On the flip side, while immediate resistance is likely to be encountered in the 24200-24250 zone, followed by a stronger resistance in the 24340-24400 band.

While the frontline indices remain range-bound for now, a sense of uneasiness and hesitation is beginning to creep into the broader markets, where a bout of profit booking is now becoming increasingly visible. In light of the prevailing conditions, it would be prudent to avoid aggressive overnight positions and remain highly selective in stock selection.

Key levels to watch

NIFTY

Support: 24050- 24000

Resistance: 24200- 24250

BANKNIFTY

Support: 57300– 57200

Resistance: 57700 – 57850

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