Option data shows aggressive call writing around 23,800–24,000, capping immediate upside momentum, while put writing near 23,200–23,000 is acting as the nearest support base.
Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities
Mumbai, 12 May 2026: Nifty index witnessed intense selling pressure and closed at 23,379.55 (-1.83%), reflecting broad-based weakness across sectors amid rising volatility and aggressive unwinding at higher levels.
Derivatives Analysis Report
Nifty slips below four-week lows; Volatility spikes as bears regain control
On the daily chart, the index decisively slipped below its 20-DEMA and breached the previous four weeks’ lows, indicating a breakdown in the short-term structure and a shift in market sentiment towards caution.
The index is currently trading within the unfilled gap zone, where 23,150 marks the lower boundary and remains a crucial support area for the ongoing structure. Technically, the breakdown below the 0.382 Fibonacci retracement zone (~23,750) confirms increasing supply pressure at higher levels, while repeated rejection near the previous consolidation range highlights lack of sustained buying interest. The formation of lower highs and lower lows on the daily chart suggests sellers are gradually regaining control, keeping momentum tilted on the downside.
RSI on the daily timeframe has slipped sharply near 40, indicating weakening momentum and increasing bearish undertone, with momentum indicators also showing loss of strength after the recent recovery phase. Meanwhile, India VIX surged towards 19.3, reflecting heightened uncertainty and sharp increase in market volatility, which could continue to keep intraday swings elevated in the near term.
From a derivatives perspective, PCR stands near 0.71, indicating a cautious-to-negative undertone in the market. Option data shows aggressive call writing around 23,800–24,000, capping immediate upside momentum, while put writing near 23,200–23,000 is acting as the nearest support base. Overall, the index has entered a volatile corrective phase, and as long as it sustains below the 20-DEMA and the 23,800 resistance zone, sell-on-rise strategy remains favourable. A decisive follow-through below 23,320 could accelerate downside momentum towards 23,000–22,900, while stability above 23,800 is essential to revive short-term recovery momentum and ease the prevailing selling pressure.
Nifty Bank cracks four-week support base
Nifty Bank index witnessed sharp selling pressure and closed lower by 1.63% at 53,555.20 (-884.70 points), indicating continuation of weakness in the broader banking space. On the daily chart, the index has decisively slipped below its previous four-week lows and breached the key 0.382 Fibonacci retracement zone (54,430), reflecting deterioration in short-term price structure.
The index is currently trading within the unfilled gap zone near 53,700–52,720, where the lower boundary of the gap at 52,720 now becomes a crucial support for the ongoing corrective phase. Technically, the index continues to trade below its 20-DEMA, highlighting sustained bearish momentum and lack of strong buying participation at higher levels. The formation of lower highs and lower lows indicates sellers continue to dominate near resistance zones.
RSI has slipped near 39, reflecting weakening momentum and increasing downside pressure. From a derivatives perspective, PCR stands near 0.70, indicating a cautious-to-negative undertone. Option data shows aggressive call writing around 54,000–54,500, capping upside recovery, while put writing is concentrated near 53,500–53,000, offering immediate support on declines.
As long as the index remains below 54,300–54,500, the sell-on-rise strategy is likely to remain favourable, while a decisive follow-through below 53,450 could intensify downside pressure towards the 52,700 zone.
Technical analysis Report
Nifty Extends Sell-Off as INR Weakens
Further; Rising VIX Compound the Pressure
Om Mehra, Technical Research analyst, SAMCO Securities
Nifty continued its downward slide for the fourth consecutive session, opening with a gap-down and closing at 23,379.55, down 436.30 points, or 1.83%. Selling pressure intensified throughout the session, dragging the index below the 13 April low, which had been acting as a strong support.
The previously flagged double-top breakdown has now accelerated, with the index slipping well below all key moving averages. Nifty has also closed below the VWAP, currently placed at 23,495.20.
The RSI has dropped to 40, approaching the oversold zone and moving sharply below its signal line. India VIX rose 3.92% to settle at 19.28. Meanwhile, USD/INR stood at 95.6180, nearing fresh lows and adding to the cautious undertone. The combination of rising volatility and a weakening rupee continues to weigh on broader market sentiment.
On the downside, the 23,200–23,150 zone remains the next important support area. On the upside, the 23,550–23,650 zone remains the immediate resistance band. Unless Nifty reclaims this zone on a closing basis, the near-term outlook is likely to remain weak, with recovery attempts expected to face selling pressure at higher levels.
Nifty Bank extended its decline for the third consecutive session, closing at 53,555.20, down 1.63%. The index has formed a three black crow pattern on the daily chart.
The inverted cup-and-handle breakdown flagged earlier continues to play out, with the index now approaching the key support level at 52,778.20, which marks a prior swing low on the daily chart. The 20-day SMA, placed at 55,000, stands well above the current price, reflecting the sharp correction from the recent recovery highs. The RSI has dropped to 40, moving closer to the oversold zone.
Nifty Private Bank declined 1.77% to settle at 25,891.60, while Nifty PSU Bank fell 1.10% to close at 8,071.35, indicating broad-based selling pressure across the banking space.
On the downside, the 53,000–52,800 zone remains the next important support area, aligned with the prior swing low. A decisive move below this level could extend the decline further.
On the upside, the 54,000–54,300 zone becomes the immediate resistance band. Unless Nifty Bank reclaims this zone on a closing basis, the near-term outlook is likely to remain under pressure.
