Technical View: As Nifty tanks 4% from peak, a look at its key support and resistance levels

Concerns about a potential U.S. recession have led to a dramatic sell-off in equities worldwide, amplifying investor anxiety. The Nifty 50 plunged 824 points, falling below 24,000 for the first time since late June, while the S&P BSE Sensex dropped by 2,686 points to an intra-day low of 78,295.

This sharp decline was triggered by disappointing U.S. economic data for June, which revealed the fastest contraction in manufacturing activity since December 2023, slowed job growth, and an unexpected rise in the unemployment rate to 4.3 percent, its highest level since October 2021. Furthermore, rising tensions in the Middle East further exacerbated investor anxiety.

"The Indian benchmark indices experienced a continued decline for the second consecutive session, with the Nifty50 plummeting nearly 3.5% and the Sensex dropping more than 4% from their all-time highs recorded last week. This significant sell-off in domestic equities has been primarily driven by weak global sentiments following disappointing U.S. economic data, particularly non-farm payrolls, manufacturing PMI, and jobless claims, which have raised concerns about a potential economic slowdown in the world’s largest economy. Additionally, the yen carry trade has further dampened global sentiment," said Vishnu Kant Upadhyay, AVP, Research and Advisory at Master Capital Services.

The Nifty50 index had recently hit the 25,000-mark for the first time ever but soon after started witnessing a downward trend. Post today's crash, technical experts tell us what are the key support and resistance levels for the benchmark Nifty now. Let's take a look:

Divam Sharma, Founder and Fund Manager at Green Portfolio

Currently, the support seems to be at 23,300 which is quite far a stretch if you see and the resistance would be the previous support that Nifty broke today, i.e. 24,200. The next resistance seems to be 24,850.

Ajit Mishra – SVP, Research, Religare Broking

We are now focusing on the 23,250-23,400 zone as key support, while the 24,500-24,700 zone will act as a resistance in the event of any rebound.

Rajesh Bhosale, Technical Analyst, Angel One

Nifty is currently hovering around its key support at the 50 EMA near 23860. Given the broad-based selling and global cues chaos, this level might break soon as well. The next key support to watch is between 23,200 and 23,300 which coincides with the 89 EMA and the 50% retracement of the rally from the election result day panic low. On the upside, immediate resistance is at 24,200 with the bearish gap between 24,700 and 24,350 acting as stubborn resistance.

Vishnu Kant Upadhyay, AVP, Research and Advisory at Master Capital Services

Given the prevailing bullish trend, it is unlikely that prices will remain low for an extended period. A recovery from these lower levels is a probable scenario. Every market decline should be viewed as an opportunity to establish new long positions for long-term holding. The Nifty50 has major support in the 24,200-24,100 range, and prices are unlikely to fall below this zone, while the Sensex has significant support around 78,400, near the 55-day EMA.

Santosh Meena, Head of Research, Swastika Investmart

Technically, Nifty has support at the budget day low of 24,075, with the next support at the 50-DMA around 23,900. Below this, the major support lies at the 23,300 level. On the upside, 24,800-25,000 will remain a key resistance area.

The recent equity sell-off has been driven by a combination of U.S. economic concerns and global geopolitical tensions. The Nifty 50 and Sensex have experienced significant declines from their recent highs, reflecting broader market anxieties. While the immediate outlook appears challenging, analysts suggest that these market declines may present opportunities for long-term investors. Key support levels for the Nifty 50 are seen between 23,300 and 23,500, with resistance levels around 24,200 and 24,850. Despite the bearish sentiment, there is cautious optimism for a potential market recovery, supported by long-term bullish trends and significant support zones.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.