The Nifty remained under pressure last week, slipping below the June low of 23,072 and marking a fresh swing low of 23,021. The index declined by 205.90 points, or 0.88%, extending its losing streak to seven consecutive weeks — the first such stretch since the COVID-19-led market fall.
Trading volumes remained subdued compared with recent weeks, while the index continued to trade below all major short- and long-term moving averages. The overall technical structure also remains weak, with the Nifty forming a sequence of lower highs and lower lows. More importantly, the index has repeatedly failed to sustain a close above the previous session’s high, indicating selling pressure at higher levels.
23,070 Remains the Key Support Zone
Although the Nifty slipped below 23,072 during the week, it managed to recover and close above this level on a weekly basis. This makes the 23,072 zone an important support for the coming sessions.
In the near term, the decline could pause if the index manages to close above Friday’s high of 23,163. Such a move would be the first indication of a possible relief rally. Above 23,163, the 8-day EMA near 23,284 would become the immediate hurdle. If the rebound gathers strength, the index could extend towards 23,353 and subsequently 23,559.
However, these levels should still be viewed as resistance within a broader weak trend unless the index begins to sustain above its key moving averages.
Momentum Indicators Continue to Favour the Bears
The Nifty is currently trading around 3.56% below its 50-day moving average, highlighting the extent of the recent weakness. The weekly Bollinger Bands have also started expanding, suggesting that larger price moves could continue in the near term.
The weekly RSI has slipped to around 37, reflecting weak momentum, while the MACD remains bearish across multiple timeframes. Together, these indicators suggest that the underlying momentum continues to favour the bears.
Nifty September Expiry Week Could Keep Volatility Elevated
The coming week is likely to remain volatile, with the September derivatives monthly expiry scheduled for Tuesday. The shortened trading week could further add to sharp intraday swings.
A close above 23,163 could improve the near-term setup and open the possibility of a recovery lasting two to three sessions. On the downside, 23,070 remains the level to watch closely. A decisive close below this support could extend the decline towards 22,826, followed by lower levels.
Nifty View: Stay Selective Until Strength Returns
The overall technical structure of the Nifty remains fragile, and the prevailing trend continues to favour caution. While the index may attempt a short-term rebound after seven consecutive weeks of decline, there is not yet enough evidence to suggest a meaningful trend reversal.
For the coming week, the 23,072–23,163 zone is likely to determine the immediate direction. Sustaining above 23,163 could trigger a relief rally towards 23,284–23,353, while a breakdown below 23,070 would reinforce the bearish setup and expose the index to further downside towards level of 22,826.
Given the monthly expiry and shortened trading week, traders should remain selective, avoid aggressive positions and wait for price confirmation before increasing exposure.
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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