IGI Logo

Nifty

? Nifty witnessed a sharp correction this week as geopolitical tensions between India and Pakistan weighed heavily on investor sentiment. After a strong start to the May series, with the index touching an intraday high of 24,365.45, rising uncertainty led to a sell-off, dragging the Nifty to a low of 23,847.85. The market managed to recover partially in the latter half, supported by selective buying in IT stocks, but the overall tone remained bearish. The Nifty ended the week down 207.35 points (0.86%) at 24,039.35, while the Sensex slipped 588.90 points (0.74%) to close at 79,212.53.

The correction can be attributed to a combination of factors such as profit booking, mixed global cues, and caution ahead of corporate earnings announcements. Additionally, underperformance in key banking stocks like Axis Bank put pressure on the Bank Nifty, which further dragged the broader indices. Investors appear to be reacting to both domestic and global developments, leading to a broad-based pullback across sectors.

From a technical perspective, signs of weakness had already begun to emerge. The Nifty formed a Hanging Man pattern on April 23, often regarded as an early signal of trend reversal. This bearish signal was confirmed on April 24, when the index reversed sharply from a high of 24,359.30. In the latest session, a strong bearish candle has been formed, reinforcing the view of a possible short-term downtrend or a consolidation phase.

Momentum indicators are also flashing caution. A Bearish Divergence has appeared on the daily chart, suggesting that upward momentum is fading despite recent highs. Additionally, the Stochastic RSI has shown a bearish crossover from the overbought zone, further supporting the reversal narrative. These signals collectively hint that the bulls are losing grip and a corrective phase could be underway.

Looking ahead, key support levels to watch are at 23,800, 23,500, and 23,400, while resistance is likely near 24,200, 24,500, and 24,600. A break below 23,800 could accelerate the correction, whereas a close above 24,500 is needed to revive bullish momentum. Until clarity emerges on the geopolitical front and corporate earnings, a cautious and stock-specific approach is recommended.

Bank Nifty

Bank Nifty witnessed a pause in its recent rally, forming a long-legged Doji bearish candle on the weekly chart, signaling indecision and potential exhaustion at higher levels. The index made a high of 56,098.70 and reversed sharply by 2.56% (1,434 points) from its all-time high to close at 54,664.05. This candlestick pattern, coupled with the reversal from record highs, indicates a possible short-term correction or consolidation phase.

Previously, Bank Nifty had shown remarkable strength, rallying 17.60% (over 8,395 points) from its recent swing low. This sharp one-way move was driven by strong earnings expectations and robust buying in frontline banking stocks. However, geopolitical tensions and news-driven volatility, along with profit booking, have triggered the current corrective phase. The market seems to be taking a breather after the aggressive run-up.

Technically, the 54,500 zone is a key support to watch in the coming sessions. A sustained breakdown below 54,500 could open the gates for further downside towards 54,000 and 53,500, levels where buying interest is likely to emerge. These levels may present favorable risk-reward setups for positional traders. However, failure to hold above 54,000 may further weaken the structure in the near term.

On the flip side, if Bank Nifty manages a strong close above 55,500, it could resume its upward momentum. In that scenario, Fibonacci extension levels project upside targets of 56,200 and 57,000 in the short term. Traders are advised to maintain a cautious approach with proper risk management, given the heightened volatility and ongoing geopolitical and earnings-related uncertainty.

For Detailed Report With Disclaimer Visit. https://choicebroking.in/disclaimer
SEBI Registration no.: INZ 000160131