Nifty Plunges: Market Sentiment Turns Cautious

The Nifty concluded the week with a notable 2.3% decline, largely negating the gains from the preceding week and introducing a cautious sentiment among traders, especially with monthly expiries looming. This caution is underscored by a nearly 7% surge in VIX on Friday alone. The IT sector has emerged as a bright spot, showing strength by trading above its 200-day Simple Moving Average (SMA), a feat not matched by most other key Nifty sectoral indices. The Pharma Index also exhibits potential for a technical recovery as it approaches a significant support cluster.

Conversely, the Nifty Realty Index demonstrates continued technical weakness, persisting within a descending channel with lower highs and lows. Its failure to sustain a move above resistance in August has kept it under pressure. Momentum indicators suggest the bears remain in control, with potential for occasional relief rallies. Any recovery is expected to face resistance, and a decisive break below 755 could lead to further declines. The Pharma Index, meanwhile, is nearing a crucial support zone around 24,950, combining Fibonacci retracement, horizontal support, and the weekly Supertrend, presenting an opportunity for bargain hunting and a potential technical rebound.