NIFTY50 stages smart recovery from lower levels; can it close above 23,600 on Wednesday?

Indian benchmark indices staged a smart recovery from the lower levels on Wednesday after plunging more than 1.5% this week. The NIFTY50 bounced back nearly 100 points from intraday low levels of 23,462 and the SENSEX bounced back above 75,000 psychological support.

The broader market continued their outperformance by declining 0.2% on NIFTY midcap 100 and smallcap 100 on Wednesday, vs 0.4% drop in the NIFTY50. The broader markets have maintained their outperformance in 2026 by trading in green on a YTD basis. The NIFTY micap 100 rose 3.3% and smallcap 100 rose over 13.4% on a YTD basis, vs a 9.9% drop in the NIFTY50 in the same period.

Mid-day chart check

On the technical charts, NIFTY50 trades near crucial support zone of 23,500-23,600, beyond which the charts indicate a fresh weakness, if it sustains for the entire week. The open interest data for the coming weekly expiry for 15th Sept, shows strong OI buildup on the downside. The 23,500 puts added more than 1 crore contracts in the intraday session on Wednesday, indicating a limited downside below 23,500 for now.

The daily charts also point towards an impending bounce back on the NIFTY50 as it trades near oversold levels. The daily RSI went below the oversold levels of 30 and the daily and 20 and EMA levels trade near 24,000 levels, which roughly 450 points or 2% away from the spot price. Theoretically, price and moving averages cant stay away from each other for long.

Combined with the open interest data, the immediate resistance for NIFTY50 stands at 23,700-23,800 zone. A sustained close above these levels during this week, would revive the hopes to it 24,000 next week.

Fresh bullishness can only be expected if the index manages to close above 24,000 on a weekly basis. Meanwhile, the 200-EMA stands at 24,350 levels, which is the long-term threshold for the index to cross, to revive the animal spirits for bulls.