The Indian equity markets witnessed a turbulent, truncated trading week, with the Nifty50 index reversing its recent uptrend and surrendering gains accumulated over the previous two weeks. Deteriorating global cues and a sharp surge in crude oil prices weighed heavily on investor sentiment, triggering a corrective phase. The benchmark index remained under sustained selling pressure throughout the week, reflecting heightened caution among market participants. Consequently, the Nifty50 index ended the week at 22600, registering a substantial decline of 2.36%, thereby weakening the near-term market outlook.

The broader market witnessed widespread weakness, with the mid-cap and small-cap indices registering significant declines, further dampening the overall market sentiment. The across-the-board sell-off intensified the ongoing correction, reflecting heightened investor caution and a deterioration in market breadth. From a technical perspective, the Nifty50 index failed to sustain above its 20-DEMA after struggling around for a couple of sessions. The index subsequently extended its decline towards the recent lows. Moreover, the 14-day RSI has delivered a negative crossover, signaling weakening momentum and warranting a cautious approach in the coming week.

On the levels, 22500 remains a crucial juncture, a decisive breach below this level could accelerate the decline towards 22200 on intermediate basis, with the psychological mark of 22000 potentially coming into focus thereafter. On the upside, the 20-DEMA, placed around 22840, is likely to act as an immediate resistance and a sustained move above this hurdle would be essential to revive positive momentum and pave the way for a potential retest of 23000, followed by 23150 in the near term.

At present, the near-term bias remains tilted towards the downside, although the broader directional trend lacks definitive confirmation. Given the prevailing uncertainty and mixed technical signals, a measured, step-by-step approach would be prudent rather than taking aggressive directional positions.

Going forward, market participants should closely monitor the aforementioned technical levels while remaining vigilant about evolving global developments, particularly movements in crude oil prices and broader international market trends. These factors are likely to play a pivotal role in determining the market’s near-term trajectory. A cautious and selective strategy appears warranted until the market establishes a more convincing trend.

Key levels to watch

NIFTY

Support: 22500 – 22200

Resistance: 22840- 23000

BANKNIFTY

Support: 53900 – 53600

Resistance: 54700 – 55000

Osho Krishan, Chief Manager – Technical & Derivative Research, Angel One.