The Nifty 50 started Monday’s session with a gap-down opening and came under immediate selling pressure. Within the first 15 minutes of trade, the index slipped below the crucial psychological mark of 23,000 and remained under pressure throughout the session. It eventually ended the day at 22,780.25, declining 1.56 per cent and marking its lowest close since April 2.
Market breadth remained extremely weak, with only three stocks from the Nifty 50 index closing in positive territory. Heavyweights such as HDFC Bank, Reliance Industries, and ICICI Bank were among the major contributors to the decline, collectively dragging the index lower by around 135 points.
India VIX jumped and implied volatility surged to higher levels in recent times
Volatility also increased sharply, with the India VIX rising 12.15 per cent to 13.63. The implied volatility moved up to 16.32, which is the highest level in recent times.
Bearish candle breaks key support levels
The sharp decline resulted in the formation of a large bearish candle on the daily chart, with the index decisively breaking below the important 23,000 support zone. The Nifty closed below the previous mentioned support level of 22,826, indicating continued weakness.
Selling was broad-based, with all major sectoral indices ending in negative territory. Trading volumes were higher compared with the previous session, and the index registered a fresh distribution day, reflecting increased selling pressure from market participants.
The immediate support for the Nifty now stands near 22,737. A sustained close below this level on Tuesday could trigger further weakness. On the upside, the index needs to reclaim the high of Monday’s session (23,080.25) to regain some momentum.
However, considering the current distance from Monday’s high, a more realistic first step for the bulls would be a recovery above 22,921, which represents a 50% retracement of Monday’s decline, and along with this, it should form a higher bottom.
Technical indicators remain weak
The broader technical structure continues to favor bears. The Nifty is currently trading nearly 4.94 per cent below its 50-day moving average, while the Bollinger Bands are trending lower, reflecting persistent weakness.
The 8-day EMA is placed at 23,172, which remains the immediate pullback resistance zone if the index manages to close above 22,921. Momentum indicators also continue to signal weakness. The RSI has slipped back to 27.69, indicating oversold conditions, though it remains above the September 15 low of 22.23.
The MACD remains bearish across multiple timeframes, while the ADX reading of 33.57 suggests that the ongoing downtrend still has strength.
September monthly expiry may keep volatility elevated
With the monthly expiry approaching, traders should closely monitor rollover activity and changes in open interest. The Nifty remains in a confirmed downtrend, and any recovery attempt will require sustained buying interest along with improvement in technical indicators.
For now, fresh long positions may carry higher risk until the index forms a stronger base. The market may continue to witness pressure, with any pullback likely to face resistance at higher levels.
The focus remains on whether the Nifty can defend the 22,737 zone and build a recovery structure in the coming sessions.
