Technical indicators suggest a pause in Nifty’s downtrend, but analysts warn of continued selling pressure at higher levels.
Nifty closed lower for five consecutive weeks, ending below 24,600 on Friday. The GIFT Nifty indicates a positive start on Dalal Street on Monday.
SEBI-registered analyst Bharat Sharma of Stockace Financial Services highlighted that, according to historical analysis, during periods of extreme pessimism, the index does not produce back-to-back red candles. Hence, after five weeks of red candles, the market is likely to pause or see a technical pullback in the week ahead.
For Monday’s session, he identified 24,580 as the support zone, followed by 24,500–24,450. On the upside, immediate resistance is seen at 24,600, which, if breached, can see the Nifty index rise to 24,660, followed by 24,720-24,780, and higher.
Sharma cautioned that any attempted pullback will likely see considerable selling pressure due to multiple resistance layers above, keeping the ‘sell on rise’ strategy in focus.
He expects the week ahead to be crucial for indices. If price action fails to hold the 24,450–24,550 zone, it could open the market to decline further, potentially toward the 200-day Exponential Moving Average (EMA) at 24,200 and even 24,000 in the event of a deeper correction.
Ashish Kyal noted that the Nifty index has remained in a downward trend for the last four weeks, with crucial price action near 24,470. He advised against buying unless the Nifty sees a daily close above 24,784 (the previous day’s high).
Instead, he suggested that one can use the pullbacks as opportunities to enter short positions for a scalping trade, while waiting for a positional trade setup to emerge. Kyal expects the markets to trade between 24,470 and 24,784.
Prabhat Mittal identified Nifty support at 24,480 and resistance at 24,820. For the Bank Nifty, he sees support at 55,300, with resistance at 56,200.
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