Archive · 5 Oct 2026
Oversold Nifty May Rebound as RBI Policy Keeps Volatility Elevated
The Nifty, an index that tracks shares, has fallen for many weeks in a row.
It has dropped below an important long-term level near 22,600.
Some indicators suggest the market has fallen so much that it could bounce for a short time.
But other signals still show that prices are under pressure, so a bounce would not necessarily mean the decline is over.
Traders are watching whether the index can rise above nearby resistance levels or fall below its recent low.
The Reserve Bank of India will announce its policy decision on October 7.
Its comments about rates, inflation and money in the financial system could make prices move sharply.
The article also says Cupid shares have broken above a recent trading range and lists levels traders may watch.
The Nifty fell 3.11% over the week, extending its decline to an eighth consecutive week and its longest losing streak in 25 years.
It closed below its 200-week moving average near 22,607 for the first time since March 2020, putting the 22,600 zone in focus.
A daily RSI of 22.86 and a recovery of nearly 200 points from the intraday low point to oversold conditions, but MACD still signals strong bearish momentum.
Thursday's low of 22,217 is immediate support; resistance levels include 22,611, 22,849 and the 20-day moving average near 23,268.
The RBI policy decision is due October 7; the article also identifies Cupid as a bullish breakout, with ₹314 as a key level and ₹338–345 as a potential target range.
- Who
- The Nifty and traders watching Indian markets; the Reserve Bank of India Monetary Policy Committee is also in focus.
- What
- The Nifty remains in a prolonged decline and is technically oversold, while traders assess possible rebound levels and the effect of the upcoming RBI policy.
- When
- The Nifty's latest decline was reported Thursday; the RBI meeting is scheduled for October 5–7, with a decision due October 7.
- Where
- Indian stock markets.
- Why
- The market has fallen sharply and broken below a key long-term moving average; uncertainty about the RBI's guidance on inflation, liquidity and interest rates may add volatility.
Rebound potential
Continued downside risks
Short-term Nifty direction
Rebound potential
Deeply oversold readings, a wide gap below short-term averages and a recovery from Thursday's low may allow a short-term pullback.
Continued downside risks
The broader technical structure is weak, the Nifty is below its 200-week moving average, and MACD shows strong bearish momentum; a break below 22,217 could bring further weakness.
RBI policy and market volatility
Rebound potential
A policy outcome or guidance that differs from market expectations could shape the market's next move.
Continued downside risks
The article says uncertainty ahead of the announcement may keep the market cautious and could lead to sharp intraday moves.
- Weekly Nifty decline
- 3.11%, its sharpest weekly decline in 29 weeks
- Losing streak
- Eight consecutive weekly declines, the longest in 25 years
- 200-week moving average
- 22,606.97; the Nifty closed below it for the first time since March 2020
- Daily RSI
- 22.86, described as deep in oversold territory
- Immediate support
- Thursday's low of 22,217
- RBI policy decision
- Due October 7, following a Monetary Policy Committee meeting scheduled for October 5–7
- Cupid levels cited
- Above ₹314 keeps the setup positive; potential upside target ₹338–345; suggested stop loss ₹292