More downside seems likely on the Nifty, Bank Nifty, says Ravi Nathani

Nifty Index

Last close: 17,604.35

The Nifty 50 index has been showing signs of bearishness in recent weeks. This can be attributed to a number of factors, including the anticipation of the Union Budget, which is expected to be released this week.

The Union Budget is a significant event for the Indian economy and can have a major impact on the stock market. As a result, wild volatility is expected in the market in the coming days.

Technical analysis of the charts suggests that the bears are likely to be stronger than the bulls in the near term. This is reflected in the bearish pattern that has emerged on the charts.

The next support levels to watch out for are 17,040 and 16,600. These levels are likely to act as key indicators of market sentiment and could provide insight into the direction of the market in the coming days.

However, bulls may find some hope at 17,475, as this level is expected to act as a key support level. This means that if the market is unable to violate this level, it could be a sign that bulls are starting to regain control, so one can also treat this level of 17,475 as a strict stop loss for long positions.

Overall, the near-term pattern for the Nifty 50 index is bearish, and investors should be cautious in the current market scenario.

No Trade Zone: 17,475 – 17,775

Expected Weekly Resistance: 18,040 – 18,256 - 18,475

Expected Weekly Support: 17,325 – 17,040 – 16,675

Nifty Bank Index

Last close: 40,345.30

The Nifty Bank index is showing a bearish trend in the near term, as indicated by technical analysis of the charts. The Relative Strength Index (RSI) is below 50 and trending downward, indicating that the market is currently in a bear mode.

Additionally, all near-term moving averages are also pointing towards a bearish market sentiment. These factors, combined with the bearish pattern on the charts, suggest that the bears are likely to be stronger than the bulls in the near term.

Bulls may find some hope at 39,620, as this level is expected to act as a key support level and could also be treated as strict stop loss. However, if the market closes below this level, it is likely to trigger further corrections on the charts.

This could lead to the Nifty Bank index finding support around 38,164, 36,850, and 34,850. It is important for investors to keep a close eye on market developments and make informed decisions accordingly. With the bearish trend and downside risks, it's always recommended to have a stop loss in place to minimize losses.

Overall, the near-term outlook for the Nifty Bank index is bearish and investors should be cautious in the current market scenario.

No Trade Zone: 39,620 – 41,050

Expected Weekly Resistance: 41,864 – 43,500 - 46,064

Expected Weekly Support: 39,000 – 38,164 – 36,850

(Ravi Nathani is an independent technical analyst. Views expressed are personal).