3 technical reasons why Nifty Smallcap is underperforming today; may dip 5%

The daily chart shows that the Nifty SmallCap is likely to trade with a negative bias as long as it sustains below 17,427; here are the key levels to watch out for on the SmallCap index.

The Nifty SmallCap index was seen underperforming the NSE benchmark Nifty 50 in Monday's trading session by a fair margin. The Nifty SmallCap 250 index was up merely 0.07 per cent while the Nifty 50 rallied 0.60 per cent.  One of the prime reasons for the Nifty SmallCap index underperformance was the change in its short-term trend from positive to negative on the technical charts.  The Nifty SmallCap 250 index had closed below the short-term moving averages and the super trend line indicator on Friday; thus signalling a likely negative trend in the near-term.   ALSO READ | Nifty may crash 1,000 pts if it closes below 25,372 today; check strategy  On Monday, the Nifty SmallCap index quoted around 17,030 levels. The 52-week high stood at 18,548 and the 52-week low at 13,315.

Here's a detailed technical outlook on the Nifty SmallCap index.

Nifty SmallCap 250 index

Current Level: 17,030  Likely Target: 16,130  Downside Risk: 5.3%  Support: 16,790; 16,515  Resistance: 17,089; 17,200; 17,427  On the technical charts, the Nifty SmallCap 250 index is seen quoting below its short-term moving averages - the 20-Day Moving Average (20-DMA) and the 50-DMA for the last two trading sessions. The SmallCap index has dipped below these short-term averages after nearly one month. 

 

    Secondly, the Nifty registered a close below its super trend line on the daily chart on Friday. As a result of which, the trend line indicator now suggests that the short-term trend is likely to remain negative as long as the index sustains below 17,427 levels. Whereas the short-term averages - 50-DMA and 20-DMA at 17,089 and 17,200 are likely to act as intermediate hurdles.  Further, the Nifty SmallCap index is seen struggling around its 20-Week Moving Average (20-WMA), which stands at 17,117 for the last many weeks. Consistent trade below the same, raises the probability of the SmallCap index falling towards the 50-WMA, which stands at 16,515, and in the bear-case scenario towards the weekly trend line support at 16,130 - this implies a downside risk of 5.3 per cent from current levels.  On the other hand, the monthly chart shows presence of near support for the Nifty SmallCap index around the 20-Month Moving Average (20-MMA), which stands at 16,790. The index has been holding above the 20-MMA since the breakout in May 2025.