Analysts say the sell-off coincided with a rise in global uncertainty as tensions between the United States, Israel and Iran threaten to disrupt oil supply routes in the Middle East, pushing up crude prices and weighing on sentiment in emerging markets.From a technical perspective, the loss of key support levels has weakened the market structure.
Hitesh Tailor, technical research analyst at Choice Broking, said the index has fallen below a key technical threshold that has historically acted as a strong reversal zone.
“From a technical perspective, the Nifty has decisively broken below the crucial 24,050 zone, which coincides with the 100-week EMA, a level that has historically acted as a strong reversal zone. This breakdown signals a deterioration in the broader technical structure and suggests that downward momentum is gaining strength,” Tailor said.
Momentum indicators also remain weak, he added, with the weekly RSI rejected around the 50 level and trending down, indicating that a clear reversal signal has not yet emerged. According to Tailor, if geopolitical tensions continue to rise and volatility remains high, the index could extend its decline towards the 23,000-22,900 range, which is now emerging as the next key support zone where some buying interest could emerge.
On the upside, he said the 24,300-24,500 range is likely to act as a strong resistance zone, where any near-term recovery could face selling pressure.
Other analysts also see the trend remaining weak in the near term unless the index manages to regain the key moving averages.
Anand James, chief market strategist at Geojit Investments, said the index is already showing signs of continued technical weakness after remaining below a key long-term indicator for several sessions.
“After closing below the 200-day SMA for five consecutive days, the continued decline appears to be gaining momentum for an extended move towards 23,535,” James said.
He added that while some momentum indicators had previously hinted at the possibility of a reversal, these signals weakened after the market closed below previous support levels.
Another market expert said the index remains under sustained selling pressure for several periods.
Ponmudi, CEO of Enrich Money, said the Nifty is currently showing a classic short-term downward trend, characterized by lower highs and lower lows. “Nifty 50 continues to trade under sustained selling pressure at the higher futures, reflecting a clear near-term downtrend,” Ponmudi said.
According to him, the immediate support zone is around 23,700-23,600, and a decisive break below that area could accelerate the decline. “A breakdown below this level could extend the decline towards the 23,400-23,300 zone,” he said.
Technical indicators also highlight the weak momentum in the market. The relative strength index (RSI) hovers around 28-30, indicating oversold conditions, but without a confirmed reversal signal. Meanwhile, the MACD indicator remains deeply negative, reflecting continued bearish momentum.
On the intraday timeframe, the index has attempted a mild recovery towards the 24,000 level after consolidating between the 23,900-23,800 region, although the recovery has been limited and there is no strong buying support.
Analysts say the trajectory of global events will play a crucial role in determining whether the market stabilizes or sees a deeper downtrend in the coming sessions.
If tensions in the Middle East escalate further and crude oil prices continue to rise, volatility in equities could remain high, keeping pressure on the Nifty. However, if geopolitical tensions ease and global risk sentiment improves, the index may attempt to stabilize around current levels and initiate a technical recovery.
(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of Economic Times)
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