Trade Setup for September 26: Nifty's next major level after five-day fall comes to 61.8% retracement

The Nifty extended its losing streak for the fifth straight session on Thursday, September 25, tracking weak global cues. The index slipped 166 points to close at 24,890, giving up more than half of the gains made during its recent rally from the August 29 bottom of 24,404 to the September 18 peak of 25,448.

The market opened on a soft note and continued to drift lower through the session. A brief recovery attempt was quickly sold into, and the index eventually ended near the day’s low. By the close, the sell-off had intensified, dragging the Nifty50 below its 50-day exponential moving average (DEMA).

The next crucial support is at the 61.8% Fibonacci retracement level of 24,803, which traders are now watching closely.

Despite the broad-based weakness, a handful of stocks managed to buck the trend. BEL, Hero MotoCorp, and Hindalco emerged as the top gainers in the Nifty pack. On the other hand, Trent, Powergrid, and Tata Motors were among the major laggards.

Sectorally, the pressure was widespread with all indices ending in the red except Nifty Metal, which rose 0.22%. The gains were led by strong rallies in Hindustan Copper, Vedanta, Hindalco, and Hindustan Zinc. The Nifty Metal index has already surged 11% so far in September. Supporting the move, copper futures hit a record high of ₹963.45/kg amid global supply concerns following disruptions at a large Indonesian mine. Realty, IT, Auto, and Pharma bore the brunt of the selling.

The broader market mirrored the weak sentiment, with the Nifty Midcap 100 falling 0.64% and the Nifty Smallcap 100 down 0.57%, marking the fourth straight day of profit-booking.

Globally, caution prevailed ahead of key US economic data releases, including GDP and initial jobless claims later today, followed by the PCE price index, an important inflation gauge, due on Friday.

Analysts remained cautious on the near-term outlook. Siddhartha Khemka said markets are likely to stay under pressure amid global headwinds, macroeconomic data releases, and developments around India-US trade talks, with concerns about growth persisting due to rising global commodity prices, a weakening rupee, and the impact of US tariffs.

Nagaraj Shetti of HDFC Securities said that the Nifty’s underlying trend remains weak, with a decisive break below 24,900 potentially opening the door to 24,700-24,600 in the near term. A sustainable move above 25,100, however, could signal a bottom reversal.

Nilesh Jain of Centrum Broking pointed out that the index has maintained its pattern of lower highs and lower lows. “The Nifty breached the crucial support level of 25,000, which is now expected to act as immediate resistance,” he said. With the monthly F&O expiry approaching, he added that a short-covering rally cannot be ruled out if the index reclaims the 25,000 mark. On the downside, the 50-day moving average at 24,876 remains key, with a breakdown possibly dragging it towards 24,600.

According to Rupak De of LKP Securities, “The bulls appear to be stepping back, giving bears more control. Immediate support is placed at 24,800, and a break below this level could trigger a deeper correction. On the upside, resistance is seen at 25,000.”Echoing a similar view, Nandish Shah of HDFC Securities said the next immediate support for the Nifty lies at 24,803, while the 25,000-25,050 zone is likely to act as resistance.