The Nifty 50's recent breakdown from its April-September trading range has increased the risk of further downside, with CLSA analyst Laurence Balanco identifying the 21,700-22,182 zone as a key support area for the benchmark index.
According to Balanco's price-action analysis, the breakdown leaves the Nifty 50 index vulnerable to a move towards this major chart support zone. The area assumes significance as it coincides with levels from which the index witnessed significant cyclical rebounds following the March 2025 and April 2026 lows.
As the Nifty approaches this support band, Balanco said he would be watching for the development of a bullish price/momentum divergence. Such a divergence would indicate that the index's downside momentum is beginning to fade, potentially providing an early signal that the correction is losing steam.
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If such a setup develops, the 21,700-22,182 region could present an attractive bottom-fishing opportunity, according to the CLSA analysis.
The broader technical framework suggests that the Nifty could continue to remain within a wide trading range, with the lower end at 21,700-22,182 and the upper end around 26,000-26,300.
On Thursday, the benchmark indices, Sensex and Nifty 50, logged their eighth straight week of decline, its longest weekly losing streak since 2001.
For investors, the development of a bullish price/momentum divergence near 21,700-22,182 could therefore become an important technical trigger to watch. Until such a signal emerges, however, the index remains vulnerable to further weakness following the breakdown from its months-long trading range.
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