Short-term traders should stay cautious; more weakness likely ahead: CA Rudramurthy BV

Dalal Street was heading for a volatile end to the week, with benchmark indices slipping below crucial support levels and traders bracing for further downside. The Nifty fell below the 25,300 mark recovering later, while Bank Nifty traded lower by nearly 0.7%, reflecting growing nervousness across sectors.

In a conversation with ET Now, market expert CA Rudramurthy BV flagged the breakdown as technically significant.

“See, Nifty definitely trading below 25,300 on spot is not a good sign, that was the last support and if you see the latest short-term low what we made recently that was at around 25,327. So now, Nifty is decisively trading below that number of 25,327 which was the recent low. And this confirms to me that yes, today if we close below 25,300, a weekly close below this will clearly signal to me that more downside is definitely there for very short term.”

According to him, a weekly close beneath this threshold would strengthen the bearish case in the near term.

Bank Nifty Joins the Weakness

What is adding to the concern is the weakness in banking stocks. Bank Nifty, which had been relatively resilient in recent sessions, slipped below the 60,800 level for the first time in this leg of the correction.“And most important Bank Nifty which was showing strength till now, for the first time today it is trading below 60,800. So, Bank Nifty spot below 60,800 also tells to me that yes, the down move in Nifty will be led by Bank Nifty and IT which was already in pain continues the leg of move on the downside for Nifty.”With IT stocks already under pressure, the broader market appears vulnerable to further downside if financials continue to weaken.Key Support and Resistance LevelsFrom a technical standpoint, the next important support for Nifty lies in the 24,900–25,000 zone. For Bank Nifty, the long-term support is seen near 59,000.

“So, for me Nifty is a sell on every rise. Bank Nifty is now clearly showing signs of more weakness and any rise in market has to be used as a shorting opportunity for short-term trader… So, do not catch this falling knife. If you are a short-term trader, definitely wait out and look for opportunity to sell on rise.”

He emphasized that traders should remain highly selective, focusing on sector-specific and stock-specific opportunities rather than broad-based buying.

What Should Investors Do?While short-term traders are advised to use rallies to lighten positions or initiate shorts, the tone is slightly different for long-term investors.

“But for long-term investor, yes, use this opportunity to buy selectively into the right sectors and stocks.”

With a truncated trading week ahead, decisive upside moves may take time to emerge. For now, the technical setup suggests caution, discipline, and a clear distinction between trading strategies and long-term investing.

As volatility returns, the market’s next directional cue may well depend on whether the Nifty manages to reclaim 25,300 — or confirms a deeper correction below it.