Market participants may remain cautious to negative in the short term as long as the Nifty 50 stays below 22,800 and trades below all key moving averages. A decisive move above 22,800 could drive the index towards the 23,000–23,200 resistance zone. However, as long as it remains below this level, the 22,500–22,400 zone is expected to act as immediate support area, followed by the 22,200 as a crucial support. Meanwhile, the Bank Nifty needs to hold the 55,000 zone for a move towards 55,600–56,000. A break below 55,000, however, could bring 54,600 and 54,000 into focus, according to experts.
On October 7, the Nifty 50 fell 173 points, or 0.76 percent, to 22,603, while the Bank Nifty slipped 73 points, or 0.13 percent, to 55,056. Market breadth remained weak, with about 1,915 shares declining against 1,377 advancing shares on the National Stock Exchange.
Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities
After marking a low of 22,217, the benchmark index Nifty witnessed a pullback of more than 550 points. However, the recovery lacked sustainability, and the index resumed its downward trajectory on Wednesday.
Technically, the index continues to trade below its key moving averages, indicating that the broader trend remains weak. That said, the gap between the 20-day EMA and the closing price has narrowed considerably, suggesting a mean reversion following the recent sharp correction. Momentum indicators and oscillators continue to reflect bearish undertones, while the daily RSI remains in the super bearish zone as per the RSI range shift framework.