The Nifty 50 index finished the week on a soft note, closing below its 20-day moving average (DMA) — a pivotal technical level which often indicates short-term bearishness. With traders getting ready for Monday’s open, analysts are keenly observing critical support and resistance zones to predict the next step.
How Nifty Performed This Week
- Weekly close: 24,420 (down ~1.1%)
- Key technical breach: Fell below 20-DMA (~24,500)
- Market mood: Risk-off sentiment amid global cues, weak bank stocks, and FII selling pressure
On the daily chart, the index created a bearish engulfing pattern, signaling a possible short-term correction phase.
Monday’s Key Levels to Watch
Support Levels:
- 24,300 – Minor horizontal support
- 24,100 – Previous swing low
- 23,900 – 50-day moving average (major short-term floor)
Going further down 24,100 might give rise to a further fall in high-beta sectors.
Resistance Levels:
- 24,500 – 20-DMA & psychological hurdle
- 24,680–24,700 – Last week’s high
- 24,850 – Strong resistance zone (May peak)
Nifty can only regain bullish momentum if it surpasses 24,500 comfortably with high volumes.
Analyst View
“Nifty was moving below its 20-DMA which is definitely a concern. We might experience a range-bound or negative movement early next week if global cues do not get better,” states Vishal Mehta, a SEBI-registered technical analyst.
“Support at 24,100 is very important — if we lose it, the decline may go as far as 23,900 quickly.”
What Traders Should Do
- Short-term traders: Be careful; do not take any new long positions unless there is a close above 24,500.
- Positional traders: Look for buy signals near 23,900–24,100 zone and keep stop-losses tight.
- Options traders: It is a good idea to have short straddle/strangle strategies on, as it is likely that volatility will increase.
Conclusion
Since Nifty dipped below its 20-DMA, next Monday is going to be very important. Monitor support at 24,100 and resistance at 24,500 — these levels will probably be the key to whether the correction will deepen or change its direction.