Indian equities concluded the volatile week on a negative note to settle at 25048, led by persistent global uncertainties - ICICI Direct
Technical Outlook
Week that was
Indian equities concluded the volatile week on a negative note to settle at 25048, led by persistent global uncertainties. The Nifty declined 2.50% for the week and closed below 200-day EMA. Except for Metals, all sectoral indices ended the week in negative territory, with Realty and Consumer Durable leading the decline, highlighting broad-based weakness.
Technical Outlook:
The weekly price action formed a bearish candle with lower high-lower low formation, indicating selling pressure accelerated at higher.
* Notably, Index has respected its 52-week EMA (24988) coinciding with its rising channel which has been held since April 2025, indicating key support reference, thereby sustaining this key support on closing basis would keep the pullback option open towards previous swing high 25,400
* On the larger degree time frame, index has been respecting 20 months EMA which has been held post Covid-lows. The current reading is placed around 24300 that corroborates with August swing low of 24338, highlighting strong support going ahed.
* Among the momentum indicator, Stochastic oscillator in weekly timeframe has entered into oversold zone, signifies temporary pause in downward movement cannot be ruled out. Therefore, we advise one should refrain from aggressive selling at current levels and instead, should adopt a selective accumulation approach, focusing on quality stocks delivering strong Q3 earnings.
* Going ahead markets are likely to witness heightened volatility in the coming week amid Pre-Budget positioning and the monthly derivative expiry as these are likely to dictate the trend for the final week of January
* Among broader market since march 2025 there has been two major intermediate correction which got arrested near 52-week EMA with average correction to the tune of 7-8% with higher bottom formation before resuming its upward trajectory. In the current scenario index has already 8% with supportive efforts near 52-week EMA. We expect index to maintain this rhythm On a market breadth perspective.
*of Nifty 500 approached towards 450-470 levels that has been associated with capitulation and panic driven selling to form a shortterm bottom. • In this week net A/D of index has reached 440 level suggesting markets likely to form short-term bottom and see a gradual recovery in next couple of weeks.
Key Monitorable:
a) Q3-FY26 earnings trajectory
b) India-EU Trade Deal
c) USDINR has clocked a fresh all-time high $91.74. Further rise in USDINR bodes negative for domestic market.
d) Gold: With > 90% up move in this financial year and approaching towards the psychological mark of $5000 the monthly RSI approached 95 levels for the first time since 1980. Such overbought conditions suggest possibility of short-term breather can not be ruled out
Week that was:
Bank Nifty ended the week on negative note down 2.7% at 58473. Nifty PSU Bank has moved in tandem, down 2.6%
Technical Outlook:
* Index opened the week on a positive note but faced profit booking and ended lower at 58473. The weekly price action formed is Bearish Engulfing candlestick carrying lower high lower low indicating selling pressure at elevated levels,
* Key point to highlight is that Index has witnessed strong resistance near physiological mark of 60000 levels which led to profit booking and approached towards its long term trendline joining lows of March and October 2025 coinciding with 20-week EMA indicating strong support.
* Index sustain above this level on closing basis will keep pullback options open towards 59500. Follow through strength above 59500 would trigger further upsides towards 60000 levels. On the downside strong support is placed at 57600 being previous resistance now acting as support as per change of polarity principle.
* Going ahead, Volatility will remain elevated ahead of key event like pre-budget ,monthly expiry and FOMC meet that will navigate market direction for next week.
* Nifty PSU Bank Index witnessed breather after 3 weeks rally and formed inside bar indicating consolidation. We expect Index to challenge 9100 and head toward 9300.
Intraday Rational:
• Trend – Lower high-low structure on weekly charts
• Levels - Buy around Fridays low
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