The new week, following a long weekend, began on a highly disappointing note, as the festivities failed to cheer the markets. Starting the session with a gap-up, buyers failed to sustain at higher levels, allowing sellers to effectively utilise the relatively higher prices and launch another scathing wave of selling. The selling pressure not only erased the early morning gains but also engulfed the entire previous session, with prices eventually closing below the prior day’s lows. The day wrapped up on a fragile note, near the session lows at the 23118 mark, registering a loss of 1.19%.

The technical setup and sentiment continue to remain nervous, particularly following the formation of such a bearish candle during the current trading session. Sellers continue to dominate proceedings, refusing to cede any meaningful control. Adding to the concern, ATR% breadth has, for the first time since the lows made in July this year, moved above the 2% zone, indicating a clear rise in volatility across market breadth and signalling the possibility of a deeper correction going forward. That said, with prices now approaching the crucial 23100–23000 support band, and overall market breadth falling to levels last witnessed around the lows made in March, buyers can hope for a turnaround or a short-term bounce in the coming sessions. In such a scenario, the proximity to key support levels, coupled with the deterioration in market breadth, could provide the backdrop for some near-term relief. However, there are no meaningful signs of a reversal on the price chart as yet. Sellers remain firmly in control, and unless some form of reversal is observed, it would be advisable and prudent to stay light and maintain a cautious approach going forward. In terms of levels, while the 23100-23000 band remains an immediate and all-important support level on the NIFTY. On the flip side, the bearish gap in the 23630–23600 zone, which aligns with the current session highs, is likely to act as an immediate resistance, followed by a stronger hurdle at the 23800 mark, which coincides with the 20 DEMA.

For the first time since May 2026, this correction which began around early August is now spreading to the broader market, highlighted by the fact that over 900 stocks underwent a correction of over 3% intraday. This worsening breadth warrants the need to heed caution and avoid any aggressive trades for now.

Key levels to watch

NIFTY
Support: 23100- 2300
Resistance: 23300- 23500

BANKNIFTY
Support: 55750– 55600
Resistance: 56100– 56800

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