Trade Setup for September 25: Nifty fall below 25,050 may trigger further downside

The market remained under selling pressure for the fourth consecutive session, with the Nifty extending its pattern of lower highs and lower lows.

After opening on a weak note, the index saw a volatile day marked by sharp swings on both sides, though the bears ultimately retained control. The Nifty closed 112 points lower at 25,056.

Power Grid, Hindustan Unilever, and NTPC emerged as the top gainers in the Nifty pack. On the other hand, Tata Motors, BEL, and Jio Finance ended as the biggest losers.

Sectoral performance reflected the overall weak sentiment, with all indices closing in the red except Nifty FMCG. Realty, Auto, and Private Banks were the worst hit.

The broader market also witnessed profit booking for the third straight day, as the Nifty Midcap 100 fell 1% and the Nifty Smallcap 100 slipped 0.70%.

Nagaraj Shetti of HDFC Securities said the short-term trend remains negative, with Nifty sliding towards a crucial support zone near 24,900 (marked by the ascending trend line and 10-week EMA). Immediate resistance is placed at 25,150.

Nilesh Jain of Centrum Broking said that a decisive move below 25,050 could open the way for further downside towards 24,920, aligning with the 50- and 100-day moving averages. However, he added that the broader structure remains positive as long as the index holds above 24,900. On the upside, a breakout above 25,150 could trigger short covering towards 25,300.

Rupak De of LKP Securities said that Nifty has been consistently trading below the 21-EMA on the hourly chart, signaling a prevailing bearish trend. Selling pressure has been emerging each time the index approaches this level. He highlighted the 25,000-25,050 zone as key support, cautioning that a decisive fall below 25,000 could lead to a deeper correction. Until then, the market is likely to remain range-bound.

Nandish Shah of HDFC Securities said the Nifty tested the 20-DEMA support at 25,042 during the session and managed to close just above it. A sustained move below this level could drag the index towards the next support at 24,926.