F&O Talk: Nifty indicating little evidence of sustained recovery, says Sudeep Shah; outlines BSE, Groww strategy amid CAS

By Sohail Khan 5 September 2026, 12:44 pm

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F&O Talk: Nifty indicating little evidence of sustained recovery, says Sudeep Shah; outlines BSE, Groww strategy amid CAS
Synopsis

Nifty faces continued bearish pressure after a fourth weekly decline, with 23,750-23,700 as crucial support and 24,150-24,200 resistance. Analysts expect volatility to stay subdued, while Bank Nifty remains range-bound. BSE, Groww and Angel One also await decisive breakouts for direction.

F&O Talk: Nifty indicating little evidence of sustained recovery, says Sudeep Shah; outlines BSE, Groww strategy amid CAS<br> — Nifty extends losses for a fourth week as key support weakens, while low volatility and range-bound Bank Nifty keep traders focused on breakout levels ahead.

The Indian stock market closed in the green on Friday, although Sensex and Nifty erased most of the intraday gains to close near intraday lows after the closing auction session (CAS).

Sensex gained 363 points to close at 76,515 while Nifty 50 rose over 24 points to end the session below 23,898 on Friday. Broader markets closed mixed, with Nifty Midcap 100 slipping into the red, while Nifty Smallcap 100 closed in the green.

Analyst Sudeep Shah, Vice President and Head of Technical & Derivatives Research at SBI Securities, interacted with ETMarkets regarding the outlook for the Nifty, options data as well as an index strategy for the upcoming week. The following are the edited excerpts from his chat:

1.) Sensex, Nifty have fallen 1% this week as CAS lingers. What are levels that traders need to keep in mind?

For the fourth consecutive week, the benchmark Nifty ended in negative territory. During the week, the index broke down from its rising channel on the daily chart, signaling a shift in the short-term trend. Escalating geopolitical tensions, rising US 10-year bond yields, and higher Brent crude prices continued to weigh on market sentiment. However, the index staged a minor pullback after testing 23,786, leaving the bulls with one crucial question: is this merely a pause, or the beginning of a meaningful recovery?

The technical picture provides little evidence of a sustained recovery at this stage. Nifty is comfortably trading below its short and long-term moving averages, while the 20, 50, and 100-day EMAs have started edging lower, indicating increasing bearish pressure. The daily RSI is hovering around 40 and remains below its 9-day average, while the daily ADX has moved above 20 and is rising, suggesting that the prevailing trend is gaining strength. With momentum and trend indicators weakening, the spotlight now shifts to a crucial support zone.

That support zone lies in the 23,750-23,700 region. The zone is important as the 61.8% Fibonacci retracement of the previous upmove from 23,070 to 24,774 is placed around this region. A sustained break below 23700 could intensify the correction towards 23,500, followed by 23,300.

On the upside, the hurdle is placed in the zone of 24,150-24,200 as it is the confluence of 50 and 100-day EMA levels. A sustained move above this range would be required to ease the prevailing bearish bias and bring stability back to the index.

Sensex View: The benchmark index, Sensex, extended its weakness for the fourth consecutive week and has breached its rising channel formation on the daily chart, indicating a deterioration in short-term trend structure. However, after registering a low of 76,135, the index witnessed a modest pullback. On the weekly timeframe, Sensex formed a bearish candle with a minor lower shadow, reflecting continued selling pressure despite some buying interest at lower levels.

Technically, the index is trading comfortably below its key moving averages, while the short-term moving averages have started to slope downward, reinforcing the negative bias. The daily RSI is hovering near the 43 mark and remains below its 9-day average, suggesting subdued momentum. Meanwhile, the daily MACD histogram has stayed in negative territory for the past 16 trading sessions, highlighting persistent bearish undertones.

Going forward, the 76,200-76,000 zone is expected to provide crucial support. A decisive move below the 76,000 mark could accelerate the corrective phase, exposing the index to lower levels of 75,400 and subsequently 74,800 in the near term. On the upside, the 20-day EMA region of 77,100-77,200 is likely to act as a strong resistance zone.

2.) What is your view on India Vix and what is it indicating after a 11% fall in one month?

India VIX has been in a declining trend since hitting a high of 28.90 on March 30. Since then, implied volatility (IV) has remained in a falling mode, keeping the market in a low-volatility environment.

The current IVP for Nifty stands at 28.57%, indicating that over the past one year, Nifty’s current IV of 11.34 has been at or below this level for only 28.57% of the time. This suggests that the current IV is at the lower end of its historical range.

The 12–12.5 zone is likely to act as an immediate resistance. Volatility is likely to remain subdued as long as India VIX stays below this zone.

However, the key risk in such a low-volatility environment is that any significant overnight development could trigger a sudden spike in volatility, potentially catching option sellers off guard.

3.) Where are you seeing strong option position right now and which Nifty strikes could act as immediate support or resistance zones going into next expiry?

For the current weekly expiry, the 24,200 level is likely to act as a strong resistance on the upside. Call writing at this strike is nearly six times stronger than put writing. Moreover, Nifty’s 100-day EMA is placed around the 24,180–24,200 zone, making this a crucial resistance to watch.

On the downside, the 23,700 level is likely to act as an immediate support, with put writing nearly six times stronger than call writing at this strike. The 23,800–23,780 zone also coincides with Nifty’s immediate swing low. A decisive breach below this zone could trigger unwinding of put-writing positions, potentially dragging Nifty towards the 23,500 mark in the near term.

4.) What is your view on Bank Nifty ?

The banking benchmark index, Bank Nifty, has remained range-bound over the last 23 trading sessions, oscillating within a narrow band of nearly 1254 points. This prolonged consolidation has resulted in a significant contraction in the Bollinger Bands, indicating a sharp decline in volatility and hinting at the possibility of a decisive move once the current range is breached.

From a technical perspective, all key moving averages are largely flat, underscoring the absence of a clear directional trend. Momentum indicators also reflect the ongoing consolidation phase. The daily RSI has been moving sideways for the past 42 trading sessions, while both the Stochastic Oscillator and MACD continue to fluctuate within a narrow range without providing a strong directional signal. Additionally, the trend strength indicator is positioned at 7.19, suggesting a lack of meaningful strength from either bulls or bears.

Going forward, the 57,800-58,000 zone is expected to act as a critical resistance area for the index. A sustained breakout above this hurdle could trigger a fresh directional upmove. On the downside, the 56,900-56,700 zone remains an important support region. A decisive breakdown below this support band may lead to increased selling pressure.

Overall, Bank Nifty continues to trade in a consolidation phase, and a convincing move beyond either end of the current range is likely to set the stage for the next trending move.

5.) What’s is your view on BSE, Groww, Angel One ?

BSE has been consolidating within a Rs 3,474–3,132 range since August 17. The falling ADX indicates a lack of volatility, while the MACD line has flattened out and remains below the zero line, pointing to weak momentum. A decisive breakout on either side of the range will provide further directional cues.

Groww has largely been consolidating within a Rs 221–180 range since May 12. The moving averages have flattened out, reflecting a sideways bias. The ADX is also flat, further indicating the absence of strong directional momentum. A decisive breakout on either side of the range will provide further directional cues.

Angel One has been consolidating within a Rs 308–275 range since the beginning of August. The stock recently moved above its 50-day EMA but failed to sustain above it. On the weekly timeframe, the stock has been oscillating between the 20-week and 50-week EMAs, reflecting a sideways bias. A decisive breakout on either side of the range will provide further directional cues.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The )

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