The Nifty remained under pressure throughout the previous week, closing lower in all four trading sessions. The index declined 3.11% for the week, its steepest weekly fall in 29 weeks. It also extended its losing streak to eight consecutive weeks, the longest such run in 25 years.
Long-Term Trend Support Gives Way
Thursday's fall pushed the Nifty close to its April 2 low of 22,182.55. The index also slipped below the rising trendline connecting the major swing lows of June 2024 and April 2025, adding to the weakness in the broader setup.
The more significant development was the weekly close below the 200-week MA, currently placed at 22,606.97. This is the first time the Nifty has closed below this long-term average since March 2020, making the 22,600 zone an important level to track in the near term.
A quick move back above the 200-week average would help ease some of the technical pressure. On the other hand, sustained trade below this level could keep the broader correction intact.
Selling Looks Stretched, but Trend Remains Weak
There were some signs of buying interest at lower levels on Thursday. The Nifty recovered nearly 200 points from the day's low and erased more than half of its intraday decline before the close. The session ended with a bearish candle carrying a long lower shadow, suggesting that buyers stepped in near the lower end of the day's range.
Even so, the index closed below the lower Bollinger Band. The daily RSI has slipped to 22.86, placing it firmly in oversold territory, while the weekly RSI is near 31 and is also approaching oversold levels. The MACD continues to show strong downside momentum.
The gap from key moving averages has also widened considerably. The Nifty is trading about 6.07% below its 50-DMA and 3.64% below its 20-DMA. This indicates that the fall has become stretched and leaves room for a short-term recovery, although there is still no clear confirmation of a trend reversal.
Resistance at 22,611 and 22,849
Thursday's high of 22,611 is the first hurdle on the upside. A move above this level could take the index towards the 8-EMA, currently placed near 22,849.
A sustained close above 22,849 would improve the chances of a relief rally towards the 20-DMA near 23,268.
On the downside, Thursday's low of 22,217 remains the immediate support. A break below this level could bring the April low of 22,182 back into focus and increase the risk of further weakness.
RBI Policy and Q2 Earnings Season to Guide Sentiment
The RBI Monetary Policy Committee will meet from October 5 to October 7, with the policy decision scheduled for October 7. The event could keep the broader market cautious, particularly rate-sensitive sectors, in the run-up to the announcement. Volatility may also remain elevated around the policy outcome, especially if the RBI's comments on inflation, liquidity or the interest-rate outlook differ from market expectations.
Attention will then shift quickly to the Q2 earnings season, which begins with Tata Consultancy Services (TCS) on October 8. The results and management commentary will be closely watched for signs of improvement in demand, deal momentum and discretionary spending. It will be interesting to see whether TCS delivers a meaningful positive surprise or whether the quarter follows the familiar pattern of cautious commentary and a gradual recovery in growth.
For now, the Nifty remains in a weak broader trend, but oversold readings suggest that a relief move cannot be ruled out. The next directional cue is likely to come from whether the index can reclaim the 22,600-22,850 zone or slips below Thursday's low, while the RBI policy and the start of the Q2 earnings season could provide the next major triggers for the market.
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