Nifty Trade Setup for September 3: Nifty Closes Below Its Trading Range

After defending the crucial psychological support level of 24,000, the 61.8% retracement level of the upswing from July 24 to August 3, and the 100-DMA on a closing basis for the last couple of trading sessions, the Nifty 50 finally breached these important levels on Wednesday. The index opened with a gap down below all three support zones and moved towards filling the gap area created on July 27, marking an intraday low of 23,786.80.

During the trading session, the index largely remained within the range formed during the first hour of trade. Although there were a few attempts to move above the upper end of this range, the index faced selling pressure at higher levels. However, the index witnessed a recovery from lower levels and, following the Closing Auction Session (CAS), managed to settle above the 23,900 mark. The index closed at 23,914.45, down by 141.35 points or 0.59%.

Market Breadth Remains Weak Despite Recovery from Lows

The Nifty 50 recovered nearly 128 points from the day’s low to reclaim the 23,900 level. However, the market breadth remained weak. Out of the 50 constituents of the Nifty index, 36 stocks ended the session in negative territory, while only 14 stocks closed higher.

Among sectoral indices, Nifty Auto, Nifty Media, and Nifty IT ended the session lower by more than 1%, reflecting broad-based selling pressure across key segments.

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Technical Setup Turns Cautious After Range Breakdown

On the daily chart, the Nifty formed a green-bodied candle with a long lower shadow. The long lower shadow indicates buying interest emerging from lower levels, while the green body suggests that the index closed above its opening level. However, despite the recovery during the session, the overall technical structure remains weak.

The index has now decisively breached the trading range of 24,000–24,400, within which it had been consolidating since mid-August. Further, it has closed below the 100-DMA and the 61.8% retracement level, indicating a loss of strength in the short-term trend.

Key Levels to Watch Ahead for Nifty

For Thursday, September 3, the immediate resistance for the Nifty is placed near the previous trading session’s low of 23,952.55, followed by the 100-DMA, which is currently positioned around 24,029. A sustained move above this level would be important for regaining positive momentum and could trigger a relief rally.

On the downside, the 23,800 level is expected to act as an important support zone. A decisive break below this level could push the index towards its July swing low near the 23,600 mark.

Nifty Slips Below Key Moving Averages and RSI Below 40

The Nifty is currently trading below its 20, 50, 100, and 200-DMA. The 20-DMA continues to slope downward, while the 50-DMA has flattened, indicating weakening short-term momentum.

The 14-period daily RSI has slipped below the 40 level for the first time since June 11, 2026. Meanwhile, the MACD histogram continues to show increasing bearish momentum.

Trading Strategy for Thursday, September 3, 2026

The recovery from lower levels provides some support for the bulls; however, the technical structure has weakened after the breakdown from the consolidation range, the breach of the 61.8% retracement level, and closing below the key moving averages.
For Thursday’s session, traders should closely monitor price action around the immediate resistance zone of 24,029. A sustained move above this level could provide room for a short-term relief rally. However, unless the index regains strength above key resistance levels, the trend is likely to remain cautious, with 23,800 and 23,600 acting as important support zones.