Indian equity benchmarks took a breather from their recent rally last week, with the Nifty ending just above the psychological 25,000 mark. Despite this pause, momentum indicators suggest a bullish setup going into the coming week, according to market analysts.
While the headline indices showed signs of mild pressure, broader markets outperformed. The BSE Midcap index rose by 0.8 per cent, while the Smallcap index gained 1 per cent, reflecting continued buying interest beyond the large-cap space.
“This suggests that investors are becoming more confident in the market’s breadth, which is often a bullish sign for the overall trend,” said Kailash Rajwadkar of Choice Broking.
Technically, the Nifty recently broke out of a Rounding Bottom pattern on the weekly chart, supported by strong volumes—considered a positive indicator.
“The pattern projects an upside potential toward 28,000 in the short term. Immediate resistance is seen at the 26,000–27,000 levels, where partial profit booking may be advisable. On the downside, 24,300 and 24,000 are strong support zones. Any correction toward these levels should be viewed as a buying opportunity, keeping the broader uptrend intact,” Rajwadkar said.
Momentum indicators also support the bullish outlook. The Relative Strength Index (RSI) stands at 61.9 and is trending upward, suggesting strengthening momentum. Furthermore, the Nifty is trading well above its key exponential moving averages — the 20, 50, 100, and 200-day — which confirms sustained positive sentiment. This technical alignment continues to support a buy-on-dips strategy.
In the derivatives segment, market volatility eased slightly. The India VIX declined by 23.49 per cent to 16.55, reflecting reduced fear and a more stable trading environment.
“However, heavy call writing at the 25,500 and 26,000 levels indicates resistance in higher zones, while strong put writing at 25,000 reaffirms it as a key support level. Traders should monitor the 25,000 mark closely — a sustained hold above it may trigger fresh buying interest, though a risk-managed approach is advised in the near term,” Rajwadkar added.
The Bank Nifty ended the week on a firm note, consolidating just below the crucial 56,000 level. Despite limited movement in Friday’s session, the index remained above previous breakout levels, indicating underlying strength in the banking sector.
The weekly chart shows a breakout from a recent consolidation range, with price action continuing to hold above that zone — a signal of potential for further upside.
According to Nandish Shah, Senior Derivative and Technical Research Analyst at HDFC Securities, the Indian Rupee appreciated marginally by 5 paise against the US dollar, closing at 85.50 on Friday. This gain was supported by a weakening dollar index and easing crude oil prices.
Among sectors, Nifty Realty, Media, and FMCG emerged as top gainers, while Nifty IT, Healthcare, and Metals ended in the red.
“The short-term technical outlook for the Nifty remains bullish as it continues to trade above its key short-term moving averages. The next resistance level is seen at 25,207, derived from the 76.4 per cent Fibonacci retracement of the previous major decline. On the downside, the 24,800 level could act as immediate support,” Shah added.
—IANS