Technical View: Nifty Under Pressure – Key Levels to Watch Ahead of the FOMC Meeting

Technical View: Nifty Under Pressure – Key Levels to Watch Ahead of the FOMC Meeting

The Nifty 50 witnessed sharp selling pressure in recent sessions, wiping out all its Friday gains. The index closed 332 points lower (1.35%) on December 17, settling at 24,336. With this, the Nifty dropped below its short- and medium-term moving averages, signaling potential near-term weakness.

Crucial Levels to Watch

The 24,200 mark (last Friday’s low) and 24,000 (December’s low) are expected to act as critical support zones. On the upside, the index faces a stiff resistance near the 24,500-24,800 range.

Senior Technical Analyst Nagaraj Shetti of HDFC Securities highlights that the positive chart structure of higher tops and bottoms remains intact. If the Nifty holds the 24,200–24,000 support range, we may see a meaningful bounce. However, a breach of these levels could trigger further selling pressure.

Derivatives Data Insights

The derivatives data suggests:

Resistance Levels: 24,500 strike (maximum Call writing), followed by 24,700.

Support Levels: 23,900 strike (maximum Put open interest), followed by 24,000.

This positions the 24,000 level as a strong support, while resistance looms around the 24,500-24,700 zone.

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Bank Nifty Analysis

The Bank Nifty followed suit, tumbling 747 points (1.39%) to close at 52,835, forming a bearish candle on the daily charts. While the index fell below its 10-day EMA (53,149), it managed to hold above the 20-day EMA (52,757), which is a positive sign.

According to Chandan Taparia, Senior VP at Motilal Oswal Financial Services:

Support Zone: 52,500 to 52,250.

Resistance Levels: 53,000, followed by 53,250.

The Bank Nifty remains stuck in a broader range of 52,500–53,750, with volatile swings likely to continue unless a breakout happens.

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Rising Volatility Ahead of the FOMC Meet

Market sentiment remains cautious ahead of the Federal Reserve’s meeting scheduled for December 17-18. The India VIX surged 3.32% to 14.49, continuing its upward trend after a 7.41% rise in the previous session. Elevated volatility signals increasing nervousness among traders.

Conclusion

For the Nifty, a decisive hold above 24,200–24,000 could set the stage for a rebound. Conversely, any slip below these levels might trigger sharp declines. Market participants should keep a close watch on global cues and the outcome of the FOMC meeting, as it could shape the next move for both Nifty and Bank Nifty.

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