Nifty 50 extends its bearish pattern The benchmark Nifty 50 opened at 22,732 and traded lower for most of the session, touching an intraday trough of 22,570. After a brief recovery, the index settled at 22,716, down 64 points (‑0.28%). The close marks the lowest daily close since 2 April.
A thin‑bodied hammer‑like candle formed, with a long lower wick suggesting some buying at lower levels. While such a formation can precede a reversal, analysts say a sustained bounce in the coming sessions is essential before the downtrend can be considered broken.
Technical backdrop - **Momentum indicators**: The Relative Strength Index stayed well below the 40 threshold at 26.71, and the MACD remained under the zero line with an expanding red histogram, signalling weak buying pressure. - **Moving averages**: The index is trading beneath its 20‑, 50‑, 100‑ and 200‑day EMAs, all of which are sloping downwards. - **Key levels**: Resistance is clustered between 22,750 and 22,800. A decisive move above this band could open the path to the psychological 23,000 level. Conversely, a break below Tuesday’s low of 22,570 may lead to the 200‑week EMA near 22,400 and further to the April low of 22,182.
Expert view Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, noted that the “lower tops and bottoms pattern is intact” and that the market is “forming a new lower bottom” without confirming a recovery. He warned that any rally to the 22,900‑23,000 zone could be a “sell‑on‑rise” opportunity, while a dip below 22,550 might trigger a slide toward 22,200.
Banking sector mirrors broader weakness Bank Nifty fell 212 points (‑0.39%) to close at 54,260, also forming a doji‑like candle with a long lower shadow. RSI stayed under 30 and MACD continued its downward trajectory, reinforcing bearish momentum.
Sudeep Shah of SBI Securities identified 53,800‑53,700 as immediate support; a breach could push the index toward 53,200. On the upside, 54,700‑54,800 may act as a short‑term hurdle, with a clean break potentially extending the rally to 55,300.
Market sentiment cues The India VIX, a gauge of market fear, dropped 1.65% to 13.41 after an intraday high of 14.77, yet remained above the 12‑point comfort zone for bulls. Lower crude‑oil prices (below $100 per barrel) offered some relief, but elevated U.S. 10‑year Treasury yields (above 5.2%) and continued foreign institutional investor outflows kept sentiment cautious.
--- *Data sourced from market technical analysis and expert commentary released on 29 September 2024.*