Nifty Faces Deeper Correction if It Falls Below 25,000, Bank Nifty Weakness Signals Elevated Market Volatility

Market Update: Nifty 50 and Bank Nifty

February 27, 2024

The Nifty 50 declined by 1.25% to close at 25,179, signaling a bearish trend. The index broke below the 200-day EMA and tested the lower Bollinger Bands, indicating a continuation of the lower highs–lower lows formation. Above-average volumes were seen, suggesting increased selling pressure.

Key Support and Resistance Zones:

Read also: SpaceX Seeks Record $75 Billion IPO, Potentially Positioning Elon Musk as the World's First Trillionaire

• Immediate support: 25,000–24,900 zone (psychological and rising trendline supports)
• Decisive fall: 24,571 (Budget Day low)
• Key resistance: 25,600
• Psychological support: 25,000

Technical Indicators:

• RSI: Declined to 40.65, indicating continued weakness
• MACD: Weakened further, with additional downside seen in the histogram
• Stochastic RSI: Flattened at 8.25 and entered the oversold zone

India VIX:

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

• Surged 4.9% to 13.7, signaling nervousness among bulls
• Expected market volatility: Remains above 12, indicating risk for bulls

Weekly Options Data:

• Maximum Put open interest: 25,000
• Maximum Call open interest: 25,400–25,500
• Maximum Call writing: 25,400, 25,300, and 25,350 strikes
• Maximum Put writing: 25,150, 25,100, and 25,000 strikes

Bank Nifty:

• Declined by 1.08% to 60,529
• Broke below the last four-day consolidation range
• Key support: 60,600
• Key resistance: 60,800–61,000

Technical Indicators:

• RSI: Declined to 50.66 and sustained below the reference line
• MACD: Turned bearish, with the histogram falling below the zero line
• Stochastic RSI: Maintained a negative crossover since February 19