With the market's technical structure and momentum indicators weakening, FIIs steadily building short positions in index futures, and bond yields and crude oil prices rising amid heightened tensions in the Middle East, the Nifty 50 is expected to remain under pressure, with consolidation likely. A decisive break below 23,400 could increase the risk of a breakdown of the 23,300 support level, followed by a move towards 23,100. On the upside, the 23,500–23,600 zone is expected to act as a resistance area. Meanwhile, if the Bank Nifty breaks below the 56,000 support level, a fall towards 55,600–55,500 could be possible. However, holding above 56,000 could increase the possibility of an upward move towards the 56,700–56,800 resistance zone, experts said.
On September 9, the Nifty 50 plunged 204 points, or 0.86 percent, to 23,432, while the Bank Nifty fell 482 points, or 0.85 percent, to 56,296. Bears maintained their dominance in market breadth, with about 1,986 shares declining compared with 1,272 advancing shares on the National Stock Exchange.
Sudeep Shah - Head of Technical and Derivatives Research at SBI Securities
Since the high of 24,774 made on August 3, which coincided with the first day of the new Closing Auction Session (CAS) settlement system, Nifty has corrected nearly 5.5 percent. The swing high zone also coincided with the 61.8 percent Fibonacci retracement level of the prior down move from 26,341 to 22,183.
During this correction, Nifty also witnessed a breakdown from its upward-sloping trendline on August 27, following which the index has remained under sustained selling pressure. FIIs have been steadily building short positions in index futures, while rising bond yields and crude oil prices, coupled with heightened tensions in the Middle East, have weighed heavily on market sentiment.