Markets Wobble Amid Weak Start to the Month!

The benchmark index has posted its third straight decline, closing below the 25,000 mark. It has broken down from a Cup and Handle pattern and slipped below the rising trendline on the daily chart. The index continues to face resistance near its all-time high, reversing from the gap zone between 25,740 and 25,640.

The Relative Strength Index (RSI), after facing resistance at the retest zone, is now heading toward the oversold region. With RSI staying below 50, the overall sentiment remains bearish.

The benchmark index is currently trading below its 10-day and 20-day EMAs, while finding minor support at the 50-day EMA on the daily chart and the 10 EMA on the weekly chart. Bulls are struggling to hold ground, while bears appear to be tightening their grip — further supported by rising short positions from FIIs, indicating the correction may extend further.

Key Levels to Watch:
Crucial support is placed at 24,750 and 24,500, a breach of which could accelerate selling pressure. On the upside, immediate resistance is seen at 25,150, followed by a stronger hurdle near 25,250.

BANK NIFTY

56,283 (-0.83%)

The Banking Index has come under sustained selling pressure, marking its third consecutive week of declines. This weakness was further confirmed as the index given a Breakaway Gap and closed below the crucial rising trendline, signaling a potential shift in trend. With the index now closing beneath the key support level of 56,600, it’s evident that bears are maintaining a firm grip on the sector.

Throughout the session, the index struggled to sustain higher levels and faced rejection from the 20-day EMA, eventually closing below both the 10-day and 20-day EMAs on the daily chart. This short-term moving average crossover reinforces the ongoing bearish sentiment. Adding to the concerns, the Relative Strength Index (RSI) has also broken below the psychological 50 mark, indicating weakening momentum and a possible continuation of the downtrend. With bearish momentum intensifying and technical indicators supporting further downside, the coming weeks will be critical for market participants, especially investors in banking stocks, to closely monitor price action and key levels.

Key Levels to Monitor in the Coming Week:
Resistance Zones: 56,800 and 57,300 — these levels will act as hurdles on any attempted pullback.
Support Zones: 56,000 and 55,500 — a breakdown below these levels may lead to deeper corrections.