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The Nifty 50 extended its southward journey for the third consecutive session and remained below the lower line of the Bollinger Bands, falling more than 150 points and making a negative start to the monthly F&O expiry week, as bears tightened their grip on the market on July 28. The index is now inching toward the 100-day EMA (24,580) and June low (24,470), which could act as the next support zones in the upcoming sessions. However, 24,800–24,900 are expected to be immediate resistance levels, according to experts.
The Nifty 50 opened lower at 24,782, and after an initial couple of hours of volatility, it was completely caught in the bears’ grip, correcting up to 24,647. The index closed at 24,681, down 156 points, and formed a bearish candle with an upper shadow on the daily charts, indicating a downside continuation pattern with a sell-on-rise opportunity.
The momentum indicators also showed negative sentiment, with the RSI dropping below the 40 mark and the Stochastic RSI maintaining a bearish crossover. The MACD histogram weakened further.
The bearish chart pattern of lower highs and lower lows remains intact on the daily chart, and the current weakness could be in line with the formation of a new lower low.
According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, the underlying trend of the Nifty remains weak, and one may expect some more declines in the coming sessions. “The next crucial lower support to be watched is around 24,500. Immediate resistance is placed at 24,800,” he said.
The monthly options data suggest that the Nifty is expected to be in the 24,500–25,000 range in the short term.
On the Call side, the 25,000 strike holds the maximum open interest, followed by the 25,200 and 25,500 strikes, with the maximum writing at the 24,800 strike, followed by 24,700 and 24,900.
On the Put side, the 24,000 strike holds the maximum open interest, followed by the 24,500 and 24,600 strikes, with the maximum writing at the 24,600 strike, followed by 24,500 and 24,200.
Bank Nifty
The Bank Nifty was also under pressure, falling 444 points to 56,085, and forming a bearish candle with a long upper shadow on the daily timeframe, indicating selling pressure at higher levels. The index closed below the upward-sloping support trendline and the 50-day EMA (56,110), while maintaining the lower highs-lower lows formation.
“The index closed below the immediate support area of 56,200–56,300, being the almost identical lows of the last two weeks. A follow-through weakness will open further downside toward 55,500 levels in the coming sessions,” said analysts at Bajaj Broking.
Meanwhile, the volatility index, India VIX, gained further and reached a three-week high, rising 6.98 percent to 12.06, the highest closing level since July 8. This rise in volatility makes the bulls cautious.
