Technical View: Caution prevails ahead of F&O expiry; Nifty 50 below 22,700 may trigger further pressur…

The latest market report highlights that The Nifty 50 witnessed significant selling pressure on September 28, particularly after breaking below the psychological backing of 23,000. The index declined more than 1.5 percent, marking a soft opening to the week and signalling caution ahead of the monthly expiry of futures and options contracts due on September 29. The technical setup pointed to further softness, with the index continuing to form softer highs and softer lows, while all key moving averages were trending downward.

In the meantime, the US 10-year bond yield remained elevated at around 5.217 percent, while Brent oil futures traded near $100 a barrel despite easing from recent swing highs, at the time of writing. Both factors weighed on market sentiment.

Experts see the possibility of a pullback surge towards 22,800-22,900 following the recent heavy selling. That stated, such a rebound is unlikely to sustain amid the prevailing bearish technical setup. Going ahead, a decisive break below 22,700 could drag the Nifty 50 towards 22,500. On the other hand, if the index rebounds and sustains above 22,800 over the next few sessions, a move towards 23,000-23,200 could be possible.

The Nifty 50 opened softer and remained under pressure as the session progressed. It touched an intraday low of 22,762 before ending the session at 22,780, down 360 points, or 1.56 percent, largely led by softness in the banking and financial services sectors.

On the daily chart, the index formed a long bearish candle while continuing its softer high-softer low formation, reflecting sustained selling pressure.

Technically, the outlook stays weak, with the index at present trading nearly 4 percent below its 50-day EMA and around 6 percent below its 200-day EMA. Both moving averages are sloping downward, indicating a prevailing bearish trend.

Additionally, the daily RSI has entered the super-bearish zone according to RSI range-shift rules, while other key indicators and oscillators keep signal firm negative momentum.

"Sentiment stays extremely weak, with rising US bond yields and oil price marks adding to the negative bias. On the downside, immediate backing is placed at 22,650–22,700, below which further correction could extend in the short term," Rupak De, Senior Technical Market observer at LKP Securities, stated.

On the elevated end, 23,000 is likely to act as a firm resistance and may prove difficult to reclaim, he further noted.

The monthly options data indicated that the Nifty 50 is anticipated to trade in the 22,500-23,200 range in the near term. Maximum Put open interest is concentrated at the 22,800 strike, followed by 22,500, while the 23,000 strike has the maximum Call open interest, followed by 23,100 and 23,200.

In the meantime, the India VIX, the market's fear gauge, spiked after a day of softness, rising 12.15 percent on Monday to 13.63, its highest closing level since July 24, signalling increased caution among bulls. A decisive move above the 14 level could gain risks for bulls.

The banking benchmark, Bank Nifty, underperformed the frontline indices on Monday, falling 1,109 points, or 1.99 percent, to 54,472, its lowest closing level since June 8, 2026.

On the daily chart, the index formed a sizeable bearish candle and breached its crucial backing level of 55,000, indicating an acceleration in selling pressure and a weakening market structure.

Technically, the index keeps trade below its key short- and long-term moving averages, reflecting a firmly bearish trend. Momentum indicators additionally stay weak, with the daily RSI slipping to 30.24, its lowest reading since April 2026, indicating firm downside momentum.

"Going forward, the zone of 55,000-55,100 is likely to act as an immediate resistance area. As long as Bank Nifty stays below the 55,100 mark, the bearish bias is anticipated to persist. In such a scenario, the index may continue its downward trajectory towards 53,900, followed by the 53,400 level in the short term," Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities, stated.