Can Nifty 50 bounce back to 23,000 levels soon? Technical experts suggest key levels to watch

Indian equity markets ended lower on Tuesday, March 4, though losses were milder than in global and Asian peers. The decline marked the sixth straight month of weakness, following a 5.8 per cent drop in February, as escalating trade tensions weighed on sentiment.

Despite attempts to recover, Nifty 50 slipped 0.17 per cent to 22,082, extending its losing streak to 10 sessions, but held on to the crucial 22,000 level. The Sensex lost 0.13 per cent, closing at 72,962. IT and auto stocks dragged markets lower, while financials and PSUs provided limited support.

Trade concerns deepened after Donald Trump reaffirmed 25 per cent tariffs on Canada and Mexico, effective Tuesday, and doubled duties on Chinese imports to 20 per cent. In response, China and Canada imposed retaliatory measures, heightening fears of a global trade war. Reports also suggest potential U.S. tariffs on agricultural imports, posing risks for India.

With trade tensions escalating, markets are likely to remain volatile. Investors will monitor U.S. tariff policies and global responses, while Indian indices need sustained buying to reverse the bearish trend.

Technical Outlook: Key Levels to Watch

The Nifty 50 extended its losing streak to the fifth consecutive month in February, marking a trend last seen in 1995-96. The benchmark index dropped 5.89 per cent in February, continuing its downward trajectory since peaking at 26,277.35 on September 27, 2024. With Nifty still below all key moving averages, market sentiment remains weak, but technical indicators suggest the possibility of a short-term recovery.

No Immediate Signs of Recovery

Om Mehra, Technical Analyst, SAMCO Securities, said Nifty remains under bearish pressure, with no signs of immediate recovery. 

“The index is currently below all key moving averages, indicating persistent weakness. However, the daily Relative Strength Index (RSI) has entered the oversold zone, suggesting a potential short-term relief rally. A weekly gap between 22,720 and 22,668 remains unfilled, and a decisive close above 22,800 would be required to trigger a structural recovery,” Mehra added.

Market breadth remains weak, with an increasing number of stocks trading below their 200-day moving average, highlighting sector-wide sluggishness. Until conditions improve, Nifty is expected to consolidate and remain range-bound before a meaningful pullback, opined Mehra.

Key technical levels for March:

Support levels: 21,750, followed by 21,281 (low from June 4, 2024).

Resistance levels: 22,800, with a breakout above 23,100 potentially triggering a bullish momentum shift.

Bearish Trend Continues: Caution Advised

Vinay Rajani, Senior Technical & Derivative Research Analyst, HDFC Securities, said the short-term trend for Nifty remains bearish as the index is trading below its critical short-term moving averages. 

“Caution is advised until Nifty manages to close above 22,500, which could signal the start of a recovery. On the downside, immediate support is seen in the 22,000–20,050 range, with additional support at 21,800 and 21,280,” as per Rajani.

Key levels to monitor:

Support levels: 22,000, 21,800, and 21,280.

Resistance levels: 22,500 and 22,800

More Weakness Ahead for Nifty?

Rupak De, Senior Technical Analyst, LKP Securities, said Nifty’s recent breakdown from a consolidation pattern has intensified its decline. The index has struggled to stage a meaningful bounce, remaining in a strong bearish grip. “Near-term support is expected around 21,800–22,000, and sustaining above 21,800 could lead to a significant recovery. However, a failure to maintain this level could trigger another round of sharp declines,” warned De.

Jigar S Patel, Senior Manager – Technical Research, Anand Rathi Shares and Stock Brokers said for the March series, 22,100–21,800 will act as a cushion, while resistance lies in the 22,500–22,800 zone. 

“A bullish butterfly pattern on the daily chart suggests a potential relief rally if Nifty closes above 22,250. Until a decisive breakout occurs, market volatility is likely to persist,” as per Patel. He advised traders to remain cautious, looking for confirmation before making aggressive trades. A sustained move above resistance could indicate strength, while failure to hold support may lead to deeper corrections, he said.

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