The new week began on a very cautious note. Following a gap-down start, prices slipped below key support levels as sellers maintained the bearish momentum during the initial part of the session. However, as prices approached the crucial 24000 mark, buyers stepped in, triggering an intraday recovery that helped recoup a significant portion of the early morning losses. The index eventually wrapped up the session at 24080, with losses of 0.39%.

The technical structure for NIFTY remains cautious, with sellers continuing to dominate proceedings. Despite the intraday recovery from key support levels, the broader setup remains tilted in favour of sellers. Unless prices stage a meaningful recovery over the next few sessions, the index is, in all probability, headed towards its recent swing lows. Importantly, despite the intraday bounce, prices have breached the key upward sloping trendline that had been providing support, marking a significant shift in market dynamics and further reinforcing the cautious outlook. In addition, the breach of the 10-column moving average on the Daily 0.1% × 3 and 0.25% × 3 Point & Figure charts, signalling a reversal in the trend to the downside, adds further weight to the deteriorating technical structure. Furthermore, a breakdown below the 24038 level would trigger a follow-through Double Bottom Sell following a bearish 100% Pole, clearly shifting the scales further in favour of the bears. In terms of levels, while the 24000 mark remains an important immediate support, a stronger support zone is placed in the 23800–23700 band. On the upside, the 24150–24200 range is likely to emerge as an immediate resistance zone, followed by a stronger hurdle in the 24300–24360 band.

In light of the developing situation, we continue to advocate a cautious stance and urge participants to avoid taking any aggressive overnight bets. That said, market breadth has cooled significantly from the levels observed at the beginning of the month, pointing towards a healthy phase of time correction in the broader market.

Key levels to watch

NIFTY

Support: 24000- 23800

Resistance: 24150- 24200

BANKNIFTY

Support: 57300– 57200

Resistance: 58100 – 58250 

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