Can Nifty break the 8-week deadlock or will pain continue? Here’s what charts indicate

India's benchmark Nifty rebounded on Monday after posting its longest weekly losing streak in 25 years, although the recovery offered little clarity on whether the market had found a floor or was merely seeing a temporary relief rally.

The Nifty gained around 1% during the session before paring some of its gains, while the Sensex climbed as much as 700 points. The rebound followed eight consecutive weeks of losses for the Nifty, during which the index shed about 8.7% since the decline began on August 16.

What are charts saying?

The Nifty is now close to a key horizontal support zone between 21,743 and 22,182, formed by the reaction lows recorded in April 2025 and April 2026, respectively.


Anand James, Chief Market Strategist at Geojit Investments, said the region has helped reverse major downtrends on the previous two occasions, raising expectations of a similar reversal this time.

However, a break below this zone would mark the end of the uptrend that has continued since the Covid-19 period and could expose the index to 19,000 and 16,700, representing the 38% and 50% retracement levels from the Covid low, respectively.

Sudeep Shah of SBI Securities said the 22,150-22,100 zone will remain the key support area, while 22,550-22,600 will be the immediate hurdle. The reaction around these two levels could determine whether the Nifty gets a breather or selling pressure resumes. He said another week of selling pressure remains possible, adding that the end of the losing streak does not necessarily signal the end of the broader downtrend.

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Shah said the 22,600-22,400 zone will be crucial. A sustained hold above this range could trigger a pullback, while a decisive breakdown could increase the risk of another leg lower.

The Nifty's fall below its 200-week moving average has added to the uncertainty. Rupak De, senior technical analyst at LKP Securities, said the index has breached the long-term trend indicator for the first time since the Covid crash. "This is not a normal breakdown," De said.

In 2020, the Nifty fell 27% after slipping below its 200-week moving average, while in 2008 it declined 38%. However, the indicator has also produced false alarms. In 2011, 2013 and 2016, the Nifty broke below the 200-week moving average but subsequently reversed after corrections of between 2% and 6%.

"As long as Nifty remains below 22,600, there is a high chance that Nifty might test 20,500," De said. He added that the decline may not happen in a straight line and periodic bounces could emerge.

Why is the market up today?

A confluence of factors supported a modest uptick in the domestic market. Oil prices slipped below $102 per barrel as higher crude exports from the Middle East and plans by G7 nations to release oil stocks added to supply, although concerns persisted over the risk of further damage to Gulf oil infrastructure amid the Iran war. Brent crude futures traded near $101.5 per barrel, while WTI crude futures fell to $90 per barrel.

Meanwhile, the probability of a Federal Reserve rate hike at its October meeting fell to around 20% after the US economy added fewer jobs than expected. The easing in oil prices and lower Fed rate hike expectations also supported the rupee, which rose 5 paise to 96.20 against the US dollar in early trade.

Today’s gains may also reflect value buying after the Sensex and Nifty ended an eight-week losing streak, their longest in 25 years. The streak was longer than the seven-week declines recorded during the 2020 Covid-19 crash and the 2008 Global Financial Crisis.

Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.