Trade Setup for September 24: Nifty looks for support at lower levels amidst volatility

The markets witnessed volatility on the Nifty's weekly expiry day. Weakness persisted for the third straight session on Tuesday, with the index ending 33 points lower at 25,170 amidst sharp intraday swings.

It was a tug-of-war between bulls and bears. After a flat open, Nifty slipped 118 points, staged a sharp 178-point rebound, but gave up much of those gains in the final hour.

The broader markets also saw profit booking for the second day in a row. The Nifty Midcap 100 declined 0.35%, while the Nifty Smallcap 100 lost 0.53%.

Among the Nifty constituents, IndusInd Bank, Axis Bank, and Bajaj Finance emerged as top gainers. On the other hand, Tech Mahindra, Trent, and SBI Life ended as major losers.

Sectoral performance was mixed. PSU Banks, Metals, and Auto stocks closed with the biggest gains, while FMCG, Realty, and IT sectors faced heavy selling pressure.

On the macro front, India's Composite PMI eased to 61.9 in September from 63.2 in August, indicating a modest slowdown but still pointing to strong expansion. Meanwhile, core sector growth surged to a 13-month high of 6.3% in August (vs. 3.7% in July), supported by robust steel and coal output and a low base effect.

Globally, India-US trade talks remained in focus, with Commerce Minister Piyush Goyal meeting US Trade Representative Jamieson Greer in New York to push negotiations. Back home, Siddhartha Khemka of Motilal Oswal expects markets to stay firm, buoyed by GST-led reforms and festive demand momentum.

On the flows front, foreign investors were net sellers in the cash market on Tuesday, while domestic institutions provided support as net buyers.



What do the Nifty 50 charts indicate?

Nagaraj Shetti of HDFC Securities said the recent corrective phase appears to be bottoming out; crucial support seen near 25,000 with chances of a rebound.

Nilesh Jain of Centrum Broking said that 25,000 is a key psychological support; holding above it could trigger a pullback towards 25,300-25,400. Broader trend remains positive, favouring buy-on-dips.

LKP Securities' Vatsal Bhuva said that the Nifty closed near its 10-day EMA after finding support near the 20-day EMA. Broader outlook remains constructive as long as the index sustains above the 50-day EMA at 24,900. Near-term range seen at 25,100–25,400.

What do the Nifty Bank charts indicate?

Meanwhile, the Bank Nifty outperformed sharply, cushioning overall market sentiment. After a weak start, it found support near its 50-day EMA.

According to Sudeep Shah of SBI Securities, price action highlights the relative strength in banking stocks. The 50-day EMA at 55,200-55,100 is acting as crucial support, while 55,800-55,900 remains a key resistance zone.