Trade Setup for March 4: Technical analysts: The underlying trend remains fragile

Indian equities ended sharply lower after a volatile session, with the Nifty slipping below 25,000. Analysts warn sentiment remains weak unless the index decisively reclaims higher levels.

Indian benchmark indices began the truncated week on a weak note, as the NIFTY 50 ended below the crucial 25,000 mark after a highly volatile trading session on Monday.

The index opened with a steep gap-down of nearly 500 points, reacting to geopolitical developments in the Middle East that unsettled global markets. However, it found support near the 24,600 zone — close to its Budget-day low — and staged a partial recovery in the latter half of the session. Despite rebounding nearly 250 points from the day’s bottom after 2 pm, the Nifty eventually settled 312 points lower.

Market breadth remained decisively negative, with broader indices also under pressure. Both midcap and smallcap stocks ended in the red, reflecting widespread risk aversion. Indian markets will remain closed on Tuesday due to a public holiday.

Sectoral and stock action

Among index heavyweights, Bharat Electronics and Hindalco Industries managed to buck the broader weakness and closed as top gainers. In contrast, InterGlobe Aviation and Larsen & Toubro weighed heavily on the benchmark.

Sectorally, only Nifty Metal and Nifty Pharma managed to close in positive territory. Consumer Durables and Oil & Gas segments were among the worst-hit, highlighting the defensive undertone in the market.

The BSE SENSEX mirrored similar volatility, tracking global cues and domestic sentiment.

Technical outlook: Key levels to watch

Technical analysts suggest that the underlying trend remains fragile.

Nagaraj Shetti of HDFC Securities noted that any rebound is likely to face stiff resistance around the 25,100 mark. He cautioned that a sustained break below 24,600 could open the door for a deeper correction towards 24,300.

Nilesh Jain of Centrum Finverse echoed similar concerns, identifying 24,600 as a crucial support zone. A decisive breach, he said, may drag the index further down to 24,200. On the upside, 25,000 remains immediate resistance, with a potential short-covering rally towards 25,200 if reclaimed convincingly.

Rupak De of LKP Securities added that sentiment is likely to remain bearish unless the Nifty sustains above 25,000. A breakdown below 24,600, he warned, could trigger a sharper correction.

Bank Nifty holds near key support

The NIFTY Bank mirrored the broader weakness early in the session but found support near its 100-day exponential moving average (EMA). The index closed at 59,840, down 1.14%.

According to Sudeep Shah of SBI Securities, the 59,400–59,300 zone is critical support. A sustained move below 59,300 could accelerate declines towards 58,800 and subsequently 58,300. On the upside, the 60,300–60,400 band is expected to act as immediate resistance, with a decisive breakout above 60,400 required to restore positive momentum.

Expiry effect and near-term sentiment

Market participants noted that derivatives expiry-related adjustments helped cushion the fall, preventing a steeper decline. However, analysts caution that unless global cues stabilise and key resistance levels are reclaimed, volatility is likely to persist.

For March 4, traders are advised to closely monitor the 24,600 support and 25,000 resistance levels on the Nifty, as a breakout or breakdown could determine the next directional move.