The Nifty ended August lower, led by heavy FPI outflows. The analyst highlights 24,400 as key support, with 25,153 as a potential trend reversal trigger.
The Nifty index ended the August series on a negative note, slipping 1.78% last week and closing the month down 1.38%, reflecting persistent selling pressure across broader markets.
SEBI-registered analyst Mayank Singh Chandel noted that the index is currently trading near crucial support zones, making the upcoming week critical for determining market direction.
India’s GDP growth came in at 7.8%, a five-quarter high and well above estimates of 6.7%. Chandel highlighted that while this may offer some early support in Monday’s session, sentiment could remain cautious given persistent tariff-related uncertainties, global headwinds, and continued Foreign Portfolio Investors (FPI) outflows.
Analyzing Derivatives & Options Data
FPIs remained aggressive sellers, offloading ₹46,903 crore during the series and dragging their long-short ratio to a multi-year low of 8.24%, indicating a strong bearish bias.
He said that the options data highlights 24,400 as a critical support zone, where significant Put writing has been observed. On the higher side, heavy Call writing between 24,500 and 25,000 signals strong resistance and shows high conviction from bears. A breakout or breakdown beyond these levels could drive the next directional move, according to Chandel.
Technical Outlook
On the weekly chart, the Nifty index formed a long bearish candle, showing sustained selling pressure. He noted that the recent swing high at 25,153 remained the immediate level to watch. Additionally, unless the index decisively closes above this point, the broader structure remains weak.
On the daily chart, the index traded below its 20-, 50-, and 100-day Exponential Moving Averages (EMAs), signaling a continuation of the short-term downtrend. On the downside, 24,400 acts as the make-or-break level, and a breakdown below it could trigger an extended slide toward 24,000 and 23,800.
Trading Strategy For The Week Ahead
Chandel said that a sustained close above 25,153 could reverse sentiment and trigger a short-covering rally toward 25,500 – 25,700, with potential extension to 25,800. On the downside, a breakdown below 24,400 may accelerate selling toward 24,000 and 23,800.
Until the index decisively reclaims 25,000–25,200, the broader bias remains sell-on-rise near resistance levels. He advised traders to remain flexible and flip long if momentum builds above 25,150.
Chandel expects the coming week to be highly volatile. Unless the Nifty index reclaims 25,000+, weakness is likely to persist, and a sell-on-rise approach is advised. However, he cautioned that a breakout above 25,153 can act as a trend reversal trigger. Chandel reiterated that risk management remains key in the current setup.
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