In the previous session, The Nifty 50 remained under selling pressure and declined 1.5 percent on May 11, extending losses for the third consecutive session. Despite the weakness, the index managed to defend the lower end of the broader 23,800–24,500 trading range. Market participants continue to closely monitor developments related to the US-Iran deal, which remains a key trigger for sentiment.
Technically, the Nifty formed a sizeable bearish candle on the daily chart after a gap-down opening, indicating increasing dominance of bears. The index slipped decisively below the 23.6 percent Fibonacci retracement level of the April rally and continued to trade below all key short-term and long-term moving averages, reflecting deterioration in the broader structure.
Momentum indicators weakened significantly. The RSI dropped to 46.11, indicating fading strength, while the MACD witnessed a bearish crossover with the histogram bar turning red for the first time since April 2. These indicators suggest increasing bearish momentum and weakening market participation.
As long as the index sustains above the crucial 23,555support zone, the possibility of a technical rebound toward 24,000–24,100 remains open in the near term. However, any decisive breakdown below 23,555 could intensify selling pressure and drag the index toward the crucial support level of 23,350.
Derivatives data reflects a weakening undertone in the market. The Nifty Put-Call Ratio (PCR) declined sharply to 0.76 on May 11 from 0.93 in the previous session, indicating rising caution among traders and increasing call writing activity at higher levels. India VIX, the market volatility gauge, surged 10.17 percent to 18.55, signalling rising discomfort for bulls amid heightened uncertainty. Analysts believe that a move above the 20 mark could increase downside risks further, while a decline below 17 would be necessary for bulls to regain confidence.
Option chain positioning indicates strong support near the 23,800-23700 strike due to put writing activity, while aggressive call writing was visible in the 24,000–24,200 zone, suggesting resistance at higher levels and continuation of the prevailing bearish bias.
The Nifty Bank also witnessed sharp weakness and declined 1.57 percent with above-average volumes, extending losses for the second straight session. The banking index formed a bearish candle on the daily timeframe and continued to trade below all key moving averages, indicating sustained weakness in the sector.
The banking index also slipped below the 23.6 percent and 38.2 percent Fibonacci retracement levels of the April rally, further confirming weakness in the broader trend. Momentum indicators remained bearish, with RSI falling to 43.74, while the MACD stayed below both the signal and zero lines with expansion in negative histogram bars.
Immediate support for Bank Nifty is placed around 53,750–53,300, while resistance is seen near 55,000–55,300. A sustained move above resistance levels will be required to stabilise sentiment in the banking space.
Overall, the technical setup suggests a weak and volatile start for the market amid rising geopolitical tensions, elevated volatility, and weakening momentum indicators. While the 23,555 level remains a crucial near-term support for Nifty, a decisive breakdown below this zone could trigger further downside pressure in the coming sessions,” says Aakash Shah, Technical Research Analyst at Choice Equity Broking Private Limited.