TECHNICAL OUTLOOK

The Indian benchmark saw a recovery within a broad consolidation phase after hitting a high near 25,659.

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Price action gained strong momentum in early September as demand increased, forming higher highs and higher lows, commonly known as the “three white soldiers” candlestick pattern on the weekly chart, triggering a bullish reaction until mid-September.

Currently, Nifty has logged seven consecutive negative sessions, though the declines have not been steep. The index is undergoing a corrective phase, with price encountering multiple resistances near the 78.6% retracement level (High: 26,277; Low: 21,743), i.e., the 25,280 mark on closing basis.

Nifty is trading below the short-term moving averages (50- and 100-DMA), which suggests caution. A further decline towards 24,540, the 61.8% retracement level, remains possible. Failure to hold this golden ratio support could extend the selloff towards 24,160, aligning with the 200-DMA, from where a bounce-back rally may emerge.