Nifty Faces Increased Risk of Further Decline Below 25,200 as Market Sentiment Turns Bearish

Market Report for February 24

Nifty 50

The benchmark Nifty 50 declined by 1.12% or 288 points to close at 25,425, marking its lowest closing level since February 2. The index fell below its 200-day SMA and tested the 200-day EMA, indicating that bears have the upper hand in the short term.

The index is currently near crucial support levels of 25,300 and 25,200, and a break below these zones could lead to a move towards 24,571, the Budget Day low. However, sustaining above 25,600, the 20-day SMA, could raise the possibility of renewed buying interest.

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Technical Indicators

The RSI sustained below the signal line and dropped to 45.39, while the MACD fell below both the reference line and the zero line. The Stochastic RSI dropped to 23.57 and has remained below the signal line since February 19.

Options Data

The weekly options data indicates that the Nifty may face immediate resistance at 25,500, where the maximum Call open interest is placed, while support is placed at 25,000, which has the maximum Put open interest.

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Bank Nifty

The Bank Nifty outperformed the benchmark Nifty 50, but weakened by 0.35% to 61,047. The banking index stayed above the 10-day EMA on a closing basis, resulting in sustainability above all key moving averages, signaling that the trend remains up despite ongoing consolidation and range-bound trading.

Technical Indicators

The RSI dipped to 57.14 and showed a bearish crossover, but has remained in a range for the last few sessions. The MACD sustained above the reference line, though the histogram registered consistently fading momentum. The Stochastic RSI has remained in a negative crossover since February 19.

Support and Resistance

The 60,800-60,700 zone is likely to act as immediate support for the Bank Nifty, while the 61,400-61,500 zone is expected to act as immediate resistance. Any sustainable move above this zone could result in the Bank Nifty extending its up move towards 62,000, followed by 62,500 in the short term.