With no respite from the selling pressure, the benchmark index witnessed its seventh consecutive week of decline. The week began on a subdued note; however, a sharp sell-off emerged mid-week, breaching key technical support levels and dragging the Nifty50 index to a 25-week low. The index eventually settled around the 23140 zone, registering a weekly decline of nearly 0.90%. Persistent weakness in market sentiment, coupled with negative global and domestic developments, kept the index under pressure throughout the week, highlighting continued caution among market participants.

The technical setup remains extremely weak, with the weekly RSI offering limited support, while the broader macro backdrop continues to reinforce the bearish undertone. Historically, the Nifty50 index has remained in a lower-bottom formation, even when the 14-day RSI has rebounded from oversold territory, the recovery has yet to translate into meaningful price strength. At the psychological 23000 level, significant Put writing provides the last line of support for the bulls. However, a failure to sustain this crucial zone could trigger another leg of correction in the benchmark index.

On the levels front, 23000 remains the key support and a critical level for the bulls to defend. A decisive breakdown below this mark could accelerate the decline toward the 22800-22700 zone over the intermediate term. On the upside, the bearish gap around 23280-23350 is expected to act as an immediate hurdle and may cap any rebound attempt. Beyond this, the sacrosanct resistance zone at 23500-23550 remains crucial. Only a decisive and sustained move above this range could signal a meaningful reversal in the prevailing downtrend and offer some respite from the ongoing selling pressure.

Going ahead, we maintain our cautious stance and recommend closely monitoring global developments over the weekend, as they have increasingly emerged as key catalysts for the domestic market setup. The broader market structure has weakened meaningfully this week, signalling underlying fragility. In the absence of a positive trigger, the bulls are likely to remain on the sidelines. Until clarity emerges, investors should avoid aggressive positioning and continue to adhere to prudent risk-management measures.

Key levels to watch

NIFTY

Support: 23000 – 22800

Resistance: 23250 – 23280

BANKNIFTY

Support: 55200 – 54900

Resistance: 55900 – 56200

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