In the truncated week in which the Nifty and the Sensex remained resilient and slipped marginally, the Bank Nifty underperformed. It plunged 679.4 points or 2.7 per cent last week, decisively breaching a key support at 24,400. Moreover, this fall has conclusively breached the 21- and 50-day moving averages. The decline in the index was triggered by poor Q2 results announcement by Axis Bank; brokerages subsequently downgraded the stock of Axis Bank as asset quality worsened.

Both private and public sectors banks witnessed selling pressure last week.

With the recent fall, the index has formed a bearish engulfing candlestick pattern in the weekly chart, implying short-term trend reversal on the cards.

Besides, the weekly indicators and oscillators are also displaying negative divergence, backing the trend reversal in the index. The daily relative strength index features in the neutral region with negative bias and the weekly RSI has entered the neutral region from the bullish zone.

Further, the daily and weekly price rate of change indicators are testing the zero line and are on the brink of entering the negative territory from the positive territory. A slip into the negative territory will imply selling interest.

Last week, the index tested the key resistance in the 24,700-24,800 band and started the decline, experiencing selling pressure.

With a downward gap, the index emphatically breached the key support level of 24,400.

However, it now tests another key support at 24,000 with a negative bias.

The short-term outlook is bearish for Bank Nifty. It can breach the current support level of 24,000 and test subsequent base at 23,800. An emphatic downward break of 23,800 can strengthen the short-term downtrend that has been in place from the September peak of 25,105.

In such a scenario, the index can decline to 23,500-23,600 band in the ensuing weeks.

Further fall below 23,500 can pull the index down to 23,300 and 23,000 in the short to medium term.

The medium-term trend has been sideways in the 23,800-25,000 band since mid-July. A strong tumble below the lower boundary can alter this trend downwards and drag the index down to 23,500 and 23,000 levels in the medium term.

On the other, hand, the index needs to strongly move beyond 24,500 to change the short-term trend and take it higher to 24,800 levels once again.

A conclusive break-through of the significant medium-term resistance level of 25,000 is needed to bring back bullish momentum and take the index up to 25,300 and 25,500.

Nifty IT index (10,890.7)

Last week, the Nifty IT index tested a key hurdle in the 10,900-11,000 range. By testing this range, the index has maintained its medium-term sideways consolidation phase in the 10,000-10,900 band since February 2017.

In early October, the index managed to surpass the key resistance level of 10,600 as well as 21 and 50-day moving average. After two weeks of consecutive rally, the index encountered resistance at around 11,000 last week.

The daily relative strength index features in the bullish zone backing the bullish momentum. The short-term outlook is positively biased.

The index can emphatically break above the current resistance band between 10,900 and 11,000 in the short tern and trend upwards. The next resistances are at 11,200 and 11,500-11,600 zone.

Significant supports are pegged at 10,800 and 10,600. However, a slump below 10,600 can find medium-term support at 10,400 and 10,200 levels.