The Nifty ended another difficult week on a weak note, falling 499.60 points, or 2.09%, and extending its decline to five consecutive weeks.
The current run now equals the index’s longest weekly losing streak of CY2026. The Nifty had earlier registered a similar five week decline between February and March.
Although the index recovered from lower levels in each of the last two sessions, the price structure remained weak. The rebounds were not strong enough to produce a higher low or take the index above the previous session’s high.
Friday’s recovery came after the Nifty tested the lower boundary of a declining channel. This has brought the session low of 23,231 into focus as an important near term support.
The overall structure, however, continues to favour the bears. The index has slipped below a cluster of Fibonacci support levels from the previous upswing and has also broken below the earlier swing low. With that, the trend setup has moved into a confirmed downtrend.
Oversold Readings Point to a Possible Technical Bounce
There are, however, signs that the recent fall may be overextended in the near term.
The Nifty has finished below the lower Bollinger Band for three consecutive sessions, a reading that often appears after a sharp directional move. If the index manages to defend Friday’s low, some recovery or short covering could emerge over the next few sessions.
Momentum indicators are also reflecting the intensity of the recent selling. The daily 14 period RSI has moved into oversold territory, while the weekly RSI is now testing the 40 mark, an important zone from a medium term perspective.
These readings leave room for a technical bounce, but the larger trend will remain weak unless price starts reclaiming key resistance levels.
Key Resistance Area for Nifty
For the coming week, the immediate resistance area is placed between 23,572 and 23,623. This zone corresponds to the downside gap created on September 9 and is likely to act as the first major hurdle during any recovery.
A sustained move above this band would be an early sign of improvement in the short term structure. If the index manages to hold above the gap zone, the next resistance is seen near 23,940.
On the downside, 23,231 remains the key level to track. A decisive break below this support could resume the decline and strengthen the bearish setup further.
The oversold readings may allow the Nifty to attempt a rebound, but the September 9 gap remains the level that needs to be reclaimed before the near term picture improves meaningfully. With global markets still volatile, the broader setup continues to warrant caution below this resistance zone.
Stock to Watch: VA Tech Wabag (WABAG)
VA Tech Wabag has broken out of a 45 week cup pattern and closed at a fresh lifetime high. The breakout was supported by higher volumes, adding strength to the move. Its Relative Strength line has also reached a new high, indicating that the stock continues to outperform the broader market.
Both short term and long term moving averages are trending higher, while the moving average ribbon remains firmly in an uptrend. The Bollinger Bands are also rising and expanding across multiple time frames, reflecting improving Momentum and volatility.
Momentum indicators remain supportive. The MACD continues to stay bullish, while the weekly RSI has bounced after retesting the 60 zone. The daily 14 period RSI also remains in the strong bullish zone. In addition, the Stochastic RSI and KST continue to show positive momentum.
The Elder Impulse System has formed a strong bullish bar across multiple time frames, further supporting the positive technical setup.
The stock has also registered a 45 week cup pattern breakout. A sustained move above ₹2,280 would keep the setup positive, with the stock potentially testing ₹2,466. A stop loss can be maintained at ₹2,160. Above ₹2,466, the next level to watch is around ₹2,610.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
