Nifty Trade Setup for October 5: Bears Strengthen Grip as Index Slips Below 22,500, 22,222 Support in Focus

The Nifty 50 remained under heavy selling pressure on Thursday, October 1, falling 198.50 points or 0.88% to 22,421.95. The index opened at 22,543.70, touched a high of 22,610.75 and slipped to 22,417.30. The decline pushed Nifty closer to its key daily support at 22,222, while the index remains below all major EMAs.

Market Breadth Remains Weak Despite Gains in Select Sectors

Market breadth remained firmly negative, with 12 stocks advancing and 38 declining out of the Nifty 50 constituents. Among sectors, CNX IT, CNX Auto, CNX Metal and CNX Media recorded gains. However, the weak breadth shows that selling pressure remained broad-based, with gains in select sectors unable to offset weakness across the wider index.

Nifty Technical Setup: Index Moves Closer to Major 22,222 Support

The daily chart continues to show a strong bearish structure, with Nifty 50 trading well below the 23,076.90 support-turned-resistance level and all major EMAs. The index has now fallen to 22,421.95, leaving it only around 200 points above the major support at 22,221.85. The hourly chart also remains below its EMA cluster, keeping the short-term structure weak.
 

Momentum Indicators Remain Oversold, But Trend Strength Is High

The daily RSI has fallen to 22.57, indicating deeply oversold conditions, while the hourly RSI stands at 34.05. The 15-minute RSI has recovered to 45.86, suggesting some short-term buying near the lows. However, the hourly ADX at 43.77 indicates strong trend strength. Therefore, the oversold RSI alone does not yet confirm a sustained reversal, and the index would need to reclaim key resistance levels for momentum to improve.

Key Levels to Track for Nifty

For the next trading session, 22,417–22,420 will be the immediate downside zone, followed by the major support at 22,221.85. A decisive break below 22,222 could expose the index to further downside. On the upside, 22,600–22,700 is the first resistance zone, followed by 22,890–23,076. A sustained move above 23,076 would be required to provide stronger evidence of a recovery.