The index oscillated within a 565 point band. India VIX rose sharply from 11.33% to 13.29, indicating increased volatility and some panic creeping back into the system. Nifty ended the week with a net loss of 222.60 points (-0.87%).
The broader framework continues to show the market is in a medium-term uptrend but is currently undergoing a corrective phase in the trend. On the weekly chart, the Nifty has slipped below its 20-week moving average (25,728) and is taking it above the 50-week MA (24,931), placing it in the critical intermediate support zone.
The price action over the past few weeks looks like a mild distribution phase near the recent highs and the index is now testing the lower boundary of the falling trend line. 24,900–24,950 zone is a key support area on a closing basis; A sustained break below this band could open the door for a deeper retracement towards the 24,350–24,400 region. On the upside, only a decisive move above 25,800-26,000 would negate immediate weakness and restore directional strength.
For the week ahead, markets are likely to see a cautious and potentially volatile start as the VIX rises and the index closes near its weekly lows. Immediate resistance levels are placed at 25,728 (20-week MA) and 26,000. Key support comes at 25100 and 24,950. The weekly RSI is at 50.17, sliding below its recent highs and now sitting in neutral territory; There is no apparent bullish or bearish divergence against the price at this point. The weekly MACD remains above the zero line but below its signal line, indicating a loss of upward momentum. The recent candle is a bearish body following a hesitation phase near the high, indicating increased supply at elevated levels.
Live events
From a pattern perspective, the index seems to be forming a short-term topping structure after failing to sustain above recent highs. An inability to hold above the upper Bollinger band and subsequent drift towards the middle band reflects declining momentum. The 50-week MA at 24,931 and the 100-week MA at 24,359 form level support clusters below current levels, while the 200-week MA continues to slope upward, indicating that the longer-term trend remains intact despite near-term pressure.
Given this setup, a measured and stock-specific approach is advisable. Traders should avoid aggressive fresh longs until the index decisively recovers to 25,800 or retests and stabilizes around the 24,900–24,950 support zone. Protection of existing benefits should take precedence over speed chasing. The week ahead calls for disciplined risk management and selective participation rather than broad-based aggressive positioning.
In our look at Relative Rotation Graphs®, we compared various sectors against the CNX500 (NIFTY 500 Index), which represents more than 95% of the free-float market cap of all listed stocks.
The relative rotation graphs (RRG) show that the Nifty PSE sector index has rotated within the leading quartile. Apart from this, the IT index is also within the leading quartile, but it is seen losing its relative momentum rapidly. Other sector indices that are within the leading quartile are services sector, Bank Nifty, PSU Bank, Metals and Financial Services indices. These groups can go beyond being relatively broad
Markets
Auto and midcap 100 index are in the weak quartile. The infrastructure index is also within this quadrant but is improving its relative pace.
The Nifty Pharma index has moved into the lagging quadrant. While the FMCG index is languishing within the lagging quartile, the realty index is seen improving its relative pace.
Media and energy indicators are placed within the improving quadrant. Important Note: The RRGTM chart shows the relative strength and momentum of a group of stocks. In the above charts, they show relative performance against the NIFTY500 index (broader markets) and should not be used directly as buy or sell signals.
(You can now subscribe to our ETMarkets WhatsApp channel)
