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Trade Setup for March 20: Nifty braces for more unwinding after ₹13 lakh crore rout ahead of weekendThursday's fall also means that the Nifty has turned negative for the week and could well report its fourth consecutive weekly drop. The index needs to close above 23,151 to report a positive weekly close. By Hormaz Fatakia   March 19, 2026, 6:46:07 PM IST (Published)4 Min ReadSo fragile was the three-day recovery on the Nifty that everything was lost in a single trading session. If rising oil prices, attacks on energy infrastructure and a stronger US Dollar was not enough, the developments at HDFC Bank added to the whammies that Dalal Street grappled with on the day of the Sensex weekly expiry.

And Friday promises to be no better either. While the three-day recovery happened on volumes that kept declining every session, the Nifty volumes on Thursday were the highest in the last two weeks (Since March 4). Moreover, Friday has been a trending day over the last two weeks, majorly on the downside, as investors and traders fear going into the weekend taking any sort of positions on either side.

The Nifty had declined over 1.2% two Fridays ago on March 6. It doubled that drop to over 2% last Friday, March 13. A break below Monday's low on Thursday would have technically meant a double-bottom formation on the charts, but such is the market, that you would not want to stick your neck out and make such a declaration.

Relative Strength Index (RSI) on the Nifty charts is back in "oversold" territories at 29.74. While traders may hope for a bounce considering the extent of the sell-off on Thursday, most of that hinges on multiple factors that are beyond the control of the street.

Brent has cooled off marginally after nearing the war-high of $119, but still remains above the $110 a barrel mark. The US Dollar may not have inched higher after crossing 100, but is holding on to that mark. There has been a meltdown in Aluminum prices on the LME. Wall Street will also react to rising oil prices and the US seeking the Congress approval to spend nearly $200 billion on the Iran war. There are multiple moving parts, that will determine how the markets will fare tomorrow.

Multiple analysts have pointed to the fact that the Nifty is positioning itself for a drop towards the April 7, 2025 lows of 21,745, in case it fails to hold on to crucial levels, which it has indeed failed to hold.

Thursday's fall also means that the Nifty has turned negative for the week and could well report its fourth consecutive weekly drop. The index needs to close above 23,151 to report a positive weekly close.

"Nifty breached its key prior swing low of 22,955, confirming bears' return with vengeance. Now below all major moving averages, the index faces resistance at 23,378, with support shifting to 22,500–22,700," said Vinay Rajani of HDFC Securities.

Shrikant Chouhan of Kotak Securities expects the bearish sentiment on the Nifty to continue for day traders as long as the index remains below 23,200 levels. He fears a drop towards 22,700 levels for the index, while on the flip side, a pullback above 23,200 and a sustained one at that, could take the Nifty back to 23,450 - 23,500 mark. "The current market texture is highly volatile, and volatility is likely to persist in the near future," he added.

Along with the Nifty, even the Nifty Bank broke below Monday's swing low on an intraday basis to make a new low of 53,240. However, the index also recovered around 200 points from those levels. For the Nifty Bank, a lot depends on how HDFC Bank fares on Friday despite all the clarifications and assurances given by the management with regards to all being well at the lender.

"The 54,000–54,200 zone is expected to act as a near-term hurdle, and failure to reclaim this range on a closing basis could keep the index under pressure. Downside levels are seen around 53,000–52,600," said Om Mehra of SAMCO Securities. He also expects any recovery on the Nifty Bank to be short-lived.Continue ReadingTagsBSE SensexNifty 50Nifty BankNifty Midcap 100Nifty Smallcap 100share market todayStock market crashTrade setup