After forming an inside candle on Wednesday, the Nifty witnessed a breakdown from the pattern on Thursday, opening with a gap down. The selling pressure intensified throughout the session, dragging the index below the low of the long bearish candle formed on September 15. The decline continued as the index breached the horizontal trendline support placed around the 23,070 level, as highlighted in the chart.
Bears Take Control
The session ended with the formation of a long bearish candle accompanied by a gap-down opening, indicating strong selling pressure. The Nifty closed below the June 8 swing low of 23,070, resulting in a breakdown of the four-month-long horizontal support zone. This breakdown has weakened the short-term market structure and shifted momentum in favour of bears.
Support Levels To Watch
The short-term trend has turned negative, and a decisive move below the 23,000 mark could further accelerate the decline towards the next support level of 22,720 in the near to medium term. On the recovery front, any pullback is likely to face resistance near the September 24 gap zone, which is placed in the range of 23,282–23,350.
RSI Indicators
The 14-period daily RSI is currently trading near 31. During the recent recovery attempt, the RSI failed to sustain above the 40 level and reversed lower, indicating a shift towards a super bearish range. The MACD histogram has also expanded on the downside, suggesting that bearish momentum is gaining strength.
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