Nifty outlook for tomorrow: More downside ahead? Index barely holds 23,000 after fresh swing low

Nifty on Thursday plunged over 3 per cent and barely managed to close above the 23,000 level after making fresh swing low, forming a bearish candle on the daily chart. The opening huge downside gap remains partially filled, said analyst as they see a possibility of more downside ahead.

For the day, the 50-pack index breached its key prior swing low of 22,955, as it slipped to 22,930.35, before closing the day 23,002.15, still down 775.65 points or 3.26 per cent. 

"The new swing low has been formed near the previous opening up gap support (15th April 2025) of around 22,900 levels and that led to minor recovery," said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

Shetti said chart pattern remains weak and Wednesday's Nifty high of 23,862 could now be considered as a new lower-top of the pattern. 

"As per this bearish pattern, one may expect further weakness in Nifty in the near term. A slide below 22,900 could open the next downside target of 22500 levels in he near term. Immediate resistance is placed at 23,350 levels," he said.

Rupak De, Senior Technical Analyst at LKP Securities said the RSI has entered a bearish crossover and is falling, suggesting increasing bearish momentum. Going forward, a decisive fall below 23,000 might trigger further downside towards 22,700 or even lower, he said.

"On the other hand, a decisive move above 23,000 could push the index towards 23,350," De said.

Vinod Nair, Head of Research at Geojit Investments  said a series of attacks on energy infrastructure in the West Asia triggered a renewed spike in oil prices and dampened investor sentiment. "The US Fed adopted a hawkish stance, signalling higher inflation amid elevated geopolitical uncertainty. Relentless FII selling pushed the rupee to a fresh all-time low, while concerns over rising input costs, potential fuel supply disruptions, and slowdown fears led to broad-based selling" he said. 

Nair said volatility may persist in the near term due to elevated oil prices and the new wave of attacks in the West Asia.

Ajit Mishra – SVP, Research at Religare Broking advised F&O participants to align their positions with the prevailing trend, adding that the is prudent to prefer option strategies over naked positions in the benchmark, while adopting a selective approach in stock-specific trades, with a strong emphasis on managing overnight risk.

"From a technical perspective, the Nifty erased the gains of the previous three sessions in a single move and breached the prior swing low around the 22,900 level during the day. These developments indicate that the corrective trend remains intact, with immediate support placed in the 22,500–22,800 zone. On the upside, any rebound towards the 23,400–23,600 range is likely to encounter strong resistance," he said.