The index was trading around 24,028 in recent sessions after witnessing a steep decline as rising crude oil prices and global risk aversion prompted investors to reduce exposure to equities. The sharp move lower has pushed the index below key technical levels, raising concerns that the current correction may not be over yet.
Analysts say the selloff has coincided with a surge in global uncertainty as tensions involving the United States, Israel and Iran threaten to disrupt oil supply routes in the Middle East, pushing crude prices higher and weighing on emerging market sentiment.
From a technical standpoint, the breakdown of important support levels has weakened the market structure.
Hitesh Tailor, technical research analyst at Choice Broking, said the index slipped below a key technical threshold that 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 historically acted as a strong reversal area. This breakdown signals deterioration in the broader technical structure and suggests that downside momentum is gaining traction,” Tailor said.
Momentum indicators also remain weak, he added, with the weekly RSI facing rejection near the 50 level and trending lower, indicating that a clear reversal signal has not yet emerged.According to Tailor, if geopolitical tensions continue to intensify and volatility remains elevated, the index could extend its decline toward the 23,000-22,900 range, which now emerges as the next key support zone where some buying interest may appear.
On the upside, he said the 24,300-24,500 band is likely to act as a strong resistance zone, where any short-term recovery could face selling pressure.
Other analysts also see the near-term trend remaining weak unless the index manages to reclaim key moving averages.
Anand James, chief market strategist at Geojit Investments, said the index has already shown signs of sustained technical weakness after remaining below a key long-term indicator for several sessions.
“Having closed under the 200-day SMA for five successive days, the ongoing slide appears to be gaining momentum for an extended move toward 23,535,” James said.
He added that while certain momentum indicators had earlier hinted at the possibility of a reversal, those signals weakened after the market closed below previous support levels.
Another market expert said the index continues to remain under persistent selling pressure across multiple timeframes.
Ponmudi, CEO of Enrich Money, said the Nifty is currently showing a classic short-term downtrend characterised by lower highs and lower lows. “Nifty 50 continues to trade under sustained selling pressure on the higher timeframes, reflecting a clear short-term downtrend,” Ponmudi said.
According to him, the immediate support zone lies 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 toward the 23,400-23,300 zone,” he said.
Technical indicators also highlight the weak momentum in the market. The relative strength index (RSI) is hovering around the 28-30 range, suggesting 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 toward the 24,000 level after consolidating between the 23,900-23,800 region, though the rebound has been limited and lacks strong buying support.
Analysts say the trajectory of global events will play a crucial role in determining whether the market stabilises or sees deeper downside in the coming sessions.
If tensions in the Middle East escalate further and crude oil prices continue to climb, volatility in equities could remain elevated, keeping the Nifty under pressure. However, if geopolitical tensions ease and global risk sentiment improves, the index may attempt to stabilise near current levels and stage a technical rebound.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)