Nifty Weekly Outlook: 24,500 holds key to next phase of gains; Focus on stock-specific bets

Markets traded range-bound though positive throughout the week, with profit-taking at higher levels and buying support on declines.

The Nifty oscillated in a 367.30-point range, moving between 24,000.20 and 24,367.30 before the week ended with gains. The India VIX rose 7.35% to 13.15, showing a modest pickup in implied volatility after slowing over the past few weeks. The headline index ended the week with an increase of 127.40 points (+0.53%).

The broader technical framework remains positive despite the absence of strong directional momentum. More importantly, the Nifty has once again defended the 23,800–24,000 zone, solidifying it as a critical support area and an immediate base for an ongoing recovery. While the index is stabilizing, it has now opened room for an extension of the rebound towards the 24,500 zone, where it is likely to face the 100-week moving average, making it an important barrier to the upside. The current recovery structure is likely to remain intact unless the index decisively breaks below the 23,800 level. A sustained move above 24,500 would be needed to further improve the medium-term technical outlook and revive strong upside momentum.

Markets are likely to start the next week on a stable note, maintaining a positive undertone. Immediate resistance is expected at 24,500, followed by 24,780. On the downside, 24,000 and 23,800 will act as important support levels, the latter being the main line of defense for the bulls.

The weekly RSI stands at 51.49 and remains neutral without showing any bullish or bearish divergence against the price. The weekly MACD is above its signal line. The recent candle has formed a small-bodied bullish candle, reflecting continued accumulation after a recent stabilization rather than any decisive breakout.

Pattern analysis shows that the index continues to recover after successfully holding the lower boundary of its broader trading structure. A repeated defense of the 23,800-24,000 support zone gives this area more technical significance and strengthens the possibility of a sustained pullback. However, the recovery is now approaching the technically important supply zone near 24,500, where the 100-week moving average is placed. This convergence of resistance is likely to make the 24,500 area a critical technical barrier.

For the coming week, market participants should continue to maintain a balanced approach. A successful defense of a key support area has improved the short-term outlook, but the index is now approaching an important resistance cluster that could trigger intermittent profit-taking.

Fresh aggressive buying should ideally be reserved for stocks showing strong relative strength and improving technical setups rather than chasing index moves near resistance. As long as the Nifty remains above 24,000, the recovery bias is likely to continue. However, traders should remain selective and adopt a stock-specific approach while closely monitoring price behavior around the 24,500 zone, which is likely to determine the market’s next directional move.

The Relative Rotation Graph (RRG) shows that Nifty Realty, Pharma, Media and Midcap 100 indices are within the leading quartile. Nifty midcap and media indices show pairing of relative momentum; These groups are likely to collectively outperform the broader Nifty 500 index.

Nifty energy, infrastructure and metal indices are in the weaker quadrant. They may show a slowdown in their overall relative performance.

The Nifty PSE index has moved into the lagging quadrant. Along with the Nifty Auto Index, it is set to underperform the broader Nifty 500 index. The Nifty IT and PSU Bank indices are also within the lagging quadrant, but they are seen improving their relative momentum against the broader markets.

Nifty services and financial services sector indices entered the improving quarter. Bank Nifty is also in the improving quadrant.

Note: The RRG chart shows the relative strength and momentum of a group of stocks. In the above charts, they show relative performance against the NIFTY500 index (broad markets) and should not be used directly or as sell signals.