- The index has corrected over 1,000 points from its early August high of 24,774
- Nifty traded below key moving averages and breached the previous low of 23,786
- Momentum indicators show weakness, with RSI and MACD remaining in bearish zones
The Nifty 50 resumed its downtrend on Monday after Friday's modest pullback, falling 118 points to close at 23,779. Bears remained firmly in control through most of the trading session, keeping the benchmark under pressure. With Monday's decline, the index has now corrected more than 1,000 points from its swing high of 24,774, recorded in early August.
"Nifty remains in a downtrend, trading below its key moving averages. Today's session saw the index breach the previous swing low of 23,786, opening the path toward the next support zone around 23,600," said Nandish Shah, Deputy Vice President, HDFC Securities.
On the upside, 24,000 remains the key level for the index. A recovery towards this level is likely to face selling pressure unless the benchmark can decisively reclaim it.
"However, the 24,000 mark remains the key psychological hurdle. Unless the index decisively reclaims and sustains above this level, selling pressure at higher levels is likely to persist, keeping the overall technical structure weak," said Ponmudi R, CEO of Enrich Money.
Bank Nifty Index
Bank Nifty also ended Monday's session on a negative note. The index opened weak and drifted lower initially before consolidating above the 57,000 mark for the remainder of the session.
On the downside, 57,000 remains an important support level. A break below this mark could drag the index towards the next support zone at 56,800-56,700, said Ponmudi. On the upside, Bank Nifty needs to reclaim and sustain above 57,500 to improve momentum and move towards the 57,700-57,800 resistance zone. A decisive breakout is likely only if the index successfully reclaims 58,000.
Momentum indicators continue to reflect weakness. The daily RSI has slipped to around 44 and remains below its signal line, while the MACD line is also below its signal line, with the histogram continuing to remain in negative territory. The setup suggests that bearish pressure remains in place.
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