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Nifty Weekly Outlook

Indian equities endured their longest losing streak in two years this week, as global headwinds and persistent selling pressure drove benchmark indices lower for a fifth consecutive week. The Nifty closed at 24,565.35 and the Sensex at 80,599.91, both declining nearly 1%. Broader market segments bore the brunt of the sell-off, with the Nifty Bank slipping 2% and the BSE midcap and smallcap indices dropping 1.3% and 1.6%, respectively. Notably, defensive plays in the FMCG sector offered a rare bright spot, while the rest of the market endured broad-based weakness.

Technically, caution remains warranted. The Nifty has breached its 100-day exponential moving average (EMA), with the next major support settling near the 200-day EMA at 24,180, followed by the psychological 24,000 mark. Momentum indicators echo this bearish mood: the RSI stands weak at 36 and the stochastic RSI signals ongoing selling momentum. Conversely, should the index reclaim 24,750, a short-term rebound towards the 25,250-25,500 zone cannot be ruled out; yet, persistent volatility and resistance near key option strikes signal overhead supply.

Looking ahead, the market is expected to remain volatile as investors track global trade developments and key domestic policy cues. The Nifty’s ability to hold above the crucial 24,180 support will be pivotal; staying above this level could pave the way for a relief rally, while a break below may trigger further downside. Until a decisive move above resistance or below support materializes, a cautious and selective approach is advisable as participants await clearer trends.

Support Levels: 24400 - 24180

Resistance Levels: 24800-25000

Overall Bias: Sideways to Bearish

BANKNIFTY

The Bank Nifty index closed at 55,617.60, registering a 1.61% decline from the previous week's close. The weekly chart indicates rejection at higher levels, as the index failed to sustain above the crucial 56,000 mark. This selling pressure suggests a potential pause in the ongoing uptrend, pointing towards a likely sideways to bearish or consolidation phase in the near term.

This week, the Bank Nifty index formed a bearish-bodied candle with an upper wick, accompanied by consistent trading volumes. This reflects sustained selling pressure at higher levels and limited buying interest, hinting at a possible consolidation or mild corrective phase in the near term. As long as the index holds below the 56,500 mark, a "sell on rise" strategy remains advisable, with downside targets placed at 55,500 and 55,000.

On the weekly timeframe, Bank Nifty is trading above all its key moving averages—including the short-term 20-day, medium-term 50-day, and long-term 200-day Exponential Moving Averages (EMA)—indicating an overall uptrend. However, the sustained selling pressure at higher levels and the inability to hold above the crucial 56,000 mark suggest that the index is entering a consolidation phase. Key downside support is seen in the 55,500–55,000 zone. The Relative Strength Index (RSI) stands at 56.85 with a negative crossover, signaling a sideways to mildly bearish bias. This consolidation phase could result in either a time-wise or price-wise correction as the index awaits fresh triggers for its next directional move.

The Bank Nifty index is likely to face significant resistance in the 56,000–56,500 range. If the index continues to move higher, ICICI Bank& HDFC Bank from the private banking sector is expected to support the uptrend. Similarly, in the public sector banking space, SBIN is anticipated to show strength and contribute to any potential upside.

For the ongoing expiry, put options show the highest concentration near the 55,500 and 55,000 strikes, marking these as key support levels. Conversely, significant open interest in call options at 56,000 and 56,500 indicates potential resistance, suggesting a likely trading range of 55,000–56,500 in the upcoming sessions. Traders are advised to remain cautious, consider a sell on rise approach, and maintain strict stop-loss levels to manage risks effectively amid ongoing market volatility and potential price fluctuations.

Support: 55500-55000

Resistance: 56000-56500

Bias- Sideways to Bearish

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