As Indian stock market benchmark indices Sensex and Nifty50 extended losses on Tuesday, technical analysts expect bearish momentum to continue with resistance shifting down to 23,800.
This comes as GIFT Nifty trades 0.06% lower at 23,699, indicating a possible negative start to the Indian equities as all US indices were trading lower on Tuesday as oil prices rallied amid Strait of Hormuz tensions. Dow Jones fell 1.26% or over 600 points near 52,741, S&P 500 declined 0.5% or nearly 35 points at 7,680.02, while Nasdaq traded 0.42% or 112 points lower at 26,394.8.
According to Dhupesh Dhameja, Derivatives Research Analyst at SAMCO Securities, “Technically, the index is approaching a crucial demand zone between 23,588 and 23,500, which now becomes the immediate area to monitor. This zone could attract bargain buying and short covering after the sharp decline. Importantly, the RSI has slipped deeper into the oversold territory at 30.88, significantly below its RSI average of 42.97. While this confirms strong bearish momentum, the oversold reading also increases the probability of a technical pullback if the index manages to defend the 23,500–23,588 support band.
He added, “A sustained hold above this zone could trigger mild short covering towards 23,800, followed by 23,900. However, any such recovery is likely to remain a technical bounce unless accompanied by sustained follow-through buying. The broader bearish structure would improve meaningfully only above 24,000, where the index would need to reclaim lost ground and establish a higher trading base.”
Nifty50 ended at 23,635.10, down 144.05 points, or 0.61%. The BSE Sensex settled at 75,577, down 555.23 points, or 0.73%. The Nifty SmallCap 100 index rose 0.18%, while the Nifty MidCap 100 index gained 0.12%.
Asian markets ended lower, with Japan’s Nikkei sliding 1.7%, followed by New Zealand’s NZX 50, Australia’s ASX 200 and South Korea’s Kospi, which fell 1.08%, 1% and 0.58%, respectively. Oil remained a key market driver after crude reached a six-week high in the previous session. Brent was last trading at $98.6 a barrel.
According to Nandish Shah, Deputy Vice President at HDFC Securities, the broader trend in the indices remains firmly bearish, with Nifty printing lower tops and lower bottoms while trading below key moving averages. “That said, with the index now more than 1,050 points below its August swing high of 24,774, the short-term trend is approaching oversold territory,” he noted.
Shah further said, “Nifty has also arrived at a critical support zone around 23,600, coinciding with a previous swing low. A decisive break below this level could open the door for further downside towards 23,478 and 23,172—key Fibonacci retracement levels that may act as the next supports. On the upside, immediate resistance has shifted down to 23,800, followed by 24,000. Sustained trading above 24,000 would be required to improve the near-term technical setup and trigger a meaningful recovery.”
Bank Nifty Outlook
Nifty Bank ended at 56,777.55, down 310.75 points, extending its recent corrective phase as selling pressure persisted and the index continued to trade below key near-term levels.
According to Dhameja, “Technically, Nifty Bank has slipped below the 57,027 support zone and is currently positioned near its crucial 200-DEMA, making the ongoing price action particularly significant. The immediate resistance is placed at 57,571, followed by 58,025. Unless the index decisively reclaims the 57,100 zone, any recovery is likely to remain vulnerable to fresh selling pressure.”
He added, “Nifty Bank is at a critical technical juncture near its 200-DEMA. A sustained hold above this zone could trigger a recovery towards 57,571, while a decisive breakdown may intensify the correction towards the next major support near 56,500. Until the index reclaims 57,100 convincingly, the broader bias remains cautious, with a sell-on-rise approach likely to dominate the near-term structure.”
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