Nifty slipped under key support at 25,400. A long bearish candle on the daily chart has raised red flags, with analysts advising caution near key levels.

After several days of consolidation, bears took control of the market on Thursday, with the Nifty index ending below 25,400, a level that had been holding firm over the last few sessions. 

SEBI-registered analyst Mayank Singh Chandel noted that the session formed a long bearish candle on the daily chart, indicating strong selling pressure throughout the day. 

He sees the next key level on the downside at 25,300, terming it as a psychological and technical support. If this level is broken, we could see the index slip further towards 25,200, which aligns with horizontal support and the previous breakout zone, making it a critical demand area. 

Chandel flagged that 25,500 now becomes a strong resistance zone for any intraday bounce on the upside. Nifty is forming a falling channel, and Thursday’s close is near the lower boundary of this channel. He added that if bulls want to retain control, holding above 25,300 is essential. 

He advised traders to closely monitor price action on Friday to gauge whether the previous session’s decline is a deeper pullback or the start of a trend reversal. For the bulls, watch 25,300–25,200 for signs of buying interest or bullish reversal candles either in the 4-hour or daily chart. For the bears, a decisive break below 25,200 could open room for a move toward 24,950–24,800. 

Chandel noted that the option buyers finally got a directional move after several range-bound sessions. Key levels to watch on Friday are: Support at 25,300, 25,200, and resistance at 25,500, 25,548. He advised caution at these levels and to wait for confirmation before entering fresh directional trades.

Bharat Sharma of Stockace Financial Services also echoed a similar sentiment, that the Nifty index unexpectedly breached the 25,400 support level and that this is unfavorable for the bullish sentiment unless the market recovers quickly and reclaims the 25,400 + status. The first quarter earnings season has commenced with TCS, which indicated stable financials; however, the way the figures were presented may lead to a correction on Friday, Sharma added. 

He maintains his positional stance, though there is a note of caution. For intraday trade, Sharma identified immediate resistance at 25,400 – a level that saw two rejections during the pullback on Thursday. For a further upmove, the index needs to reclaim 25,400 and higher. If it sustains above this level, we could see the index reaching 25,480-25,500-25,550.

On the downside, immediate support lies at 25,340. Should this level be breached, the next supports are expected at 25,300, 25,260, and 25,200. Sharma said that if the index does not reclaim 25,400, the focus would shift to 25,200-25,100 as an important support on the downside.

Additionally, with the India VIX dropping below 12, options pricing is expected to remain rational but slower.

Financial Sarthis noted that the Nifty closing below its short-term 10-day Exponential Moving Average (EMA) showed early signs of waning momentum. The index now approaches its 20-day EMA, which often acts as a dynamic support in a trending market. They believe that Nifty could now retest its previous resistance at 25,250-25,280, which could now act as support. 

They advised watching the 25,250–25,280 zone closely; if the index holds this, it may invite fresh buying; however, a breakdown below this could mean deeper retracement.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<