The Nifty witnessed a weak start to the previous week, declining in the first two trading sessions, with a sharp fall recorded on Tuesday. However, the index recovered gradually over the next three sessions and managed to close higher from the lower levels. Despite this recovery, the overall trend remained under pressure as the index extended its losing streak to the sixth consecutive week, marking one of the longest correction phases in recent times.
The index also moved close to its previous swing low. Although Nifty registered three consecutive positive closing sessions, it was unable to close above the 50% retracement level of the large bearish candle formed on September 15. This indicates that buying interest is present at lower levels, but the recovery lacks sufficient strength to confirm a trend reversal.
September 15 Large Bearish Candle Remains an Important Reference Point
The September 15 large bearish candle remains an important reference point for the near-term trend. The candle formed a wide range between 23,118 and 23,592, and a breakout on either side of this range could determine the next directional move.
Until then, the index is likely to remain in a consolidation phase, with movement largely confined within the recent trading range. A decisive breakout from this zone may provide clarity on whether the market is preparing for a recovery or resuming the corrective trend.
Six-Week Correction Reaches a Critical Phase
From a larger time-frame perspective, the price structure continues to remain weak and corrective. The Nifty has slipped below its 20-week and 100-week moving averages, while the 50-week moving average continues to remain significantly higher, reflecting continued weakness in the medium-term trend.
The ongoing decline has now matched the longest consecutive weekly losing streak seen during the recent past. In terms of price correction, the decline has extended beyond the fall witnessed between June and August 2025. After such an extended correction, a short-term pullback cannot be ruled out. However, for a meaningful recovery phase, the index needs to sustain above key resistance levels.
A close above the previous week’s high of 23,593 would indicate the possibility of a counter-trend consolidation. Further strength would require the index to move above the 20-week moving average at 23,955 and the 50-day moving average at 24,079. On the downside, a break below the June 11 low of 23,070 would weaken the structure further and could open the possibility of a decline towards the next major support level of 22,737.
Technical Indicators Show Mixed Signals
Momentum indicators are presenting a mixed picture. The weekly RSI has declined below the 40 mark, indicating weakness in the broader trend. However, the daily 14-period RSI has recovered from the oversold zone and moved above its nine-period average, suggesting some improvement in short-term momentum.
At the same time, the weekly MACD has generated a fresh bearish crossover, indicating that the medium-term momentum remains under pressure. Market breadth also continues to reflect weakness, with several large-cap stocks trading near their 52-week lows. Mid-cap and small-cap indices, after reaching fresh highs, have also witnessed weakness over the past three weeks.
Outlook for Nifty: 23,000–23,100 Zone Remains Crucial
For the coming week, the Nifty is expected to remain range-bound, with last week’s trading range likely to play an important role. The 23,000–23,100 zone, which represents the recent swing low area, will be crucial for the index.
Holding this support zone could allow the market to attempt another recovery within the broader range. However, a decisive breakdown below this level would increase downside risks and expose the index to the next major support zone.
On the upside, a sustained move above 23,592 would improve the short-term outlook, with immediate targets placed at 23,751, followed by the 20-week moving average near 23,955. Until these levels are reclaimed, the broader trend is likely to remain cautious, with rallies facing selling pressure at higher levels.
Stock to Watch: Aditya Birla Capital (ABCAPITAL)
Aditya Birla Capital witnessed a strong upmove from the June 2026 low to the August 2026 high, gaining nearly 29%. After this rally, the stock entered a corrective phase, which developed into a downward-sloping channel pattern.
Recently, the stock broke out of this channel formation with a strong bullish candle, indicating renewed buying interest. The breakout was supported by a significant rise in trading volume, adding strength to the move. The stock is currently trading above its key short-term, medium-term and long-term moving averages, suggesting an improvement in the overall trend.
Momentum indicators are also showing positive signals. The 14-period daily RSI has formed a fresh swing high, while the weekly RSI has witnessed a range shift into the super bullish zone, reflecting improving momentum across time frames.
Overall, the breakout from the channel pattern, supported by higher volumes and positive momentum indicators, indicates strength in the stock. Sustaining above the ₹411 level could keep the positive bias intact, with potential upside towards ₹430, followed by ₹444. The stop loss for the trade can be placed at ₹389.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
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