Markets moved in a relatively narrower range throughout the week, with a clear negative bias, and ended lower. After opening near the upper end of the range, Nifty attempted an early push towards 26,009, but failed to sustain the move and gradually drifted lower. Selling pressure intensified towards the second half, driving the index to an intra-week low of 25,444 before stabilizing near the lower end of the range.
The index was oscillating in a band of 565 points. India’s VIX rose sharply by 11.33% to 13.29, reflecting a resumption of volatility and some nervousness re-emerging in the system. Nifty ends the week with a net loss of 222.60 points (-0.87%).
AgenciesThe broader structure continues to show a market that is in a medium-term uptrend but is currently experiencing a corrective phase within that trend. On the weekly chart, Nifty has fallen below its 20-week moving average (25,728) and is above the 50-week MA (24,931), placing it in a critical intermediate support zone.
Price action over the past few weeks resembles a slight distribution phase near recent highs, and the index is now testing the lower boundary of the downtrend line. The 24,900-24,950 zone remains a major closing support zone; a prolonged 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 back above 25,800-26,000 would negate the immediate weakness and restore directional strength.
For the week ahead, markets are expected to get off to a cautious and potentially volatile start given the VIX rising and the index closing near its weekly low. Immediate resistance levels are placed at 25728 (20-week MA) and 26000. Key supports lie at 25100 and 24950. The weekly RSI stands at 50.17, having slipped below its recent highs and is now in neutral territory; there is no visible bullish or bearish divergence from the price at this point. The weekly MACD remains above the zero line but is below its signal line, indicating a loss of bullish momentum. The last candle is a bearish body after a phase of hesitation near the highs, hinting at increasing supply at high levels.
From a trend perspective, the index appears to be forming a short-term top structure after failing to hold above recent highs. The inability to sustain above the upper Bollinger band and the subsequent drift towards the middle band reflects slowing momentum. The 50-week MA at 24,931 and the 100-week MA at 24,359 form a group of layered support below current levels, while the 200-week MA continues to rise, highlighting that the long-term trend remains intact despite near-term pressure.
Given this setup, a measured, title-specific approach is recommended. Traders should avoid further aggressive long positions until the index decisively recovers 25,800 or retests and stabilizes around the 24,900-24,950 support zone. Protecting existing gains should take precedence over continuing momentum. The week ahead will require disciplined risk management and selective participation rather than large-scale aggressive positioning.
In our Relative Rotation Graphs® review, we compared various sectors to the CNX500 (NIFTY 500 index), representing over 95% of the free float market capitalization of all listed stocks.
AgenciesAgenciesThe relative rotation charts (RRG) show that the Nifty PSE sector index has moved inside the main quadrant. Furthermore, even the IT index is in the upper quadrant, but it seems to be giving up its relative momentum quickly. Other sectoral indices that are in the main quadrant are Services Sector, Bank Nifty, PSU Bank, Metals and Financial Services Indices. These groups can relatively outperform the general population.
markets.
The Auto Index and the Midcap 100 Index are in the weakening quadrant. The infrastructure index is also in this quadrant, but it is improving relative to its relative dynamics.
The Nifty Pharma index retreated to the lagging quadrant. While the FMCG index languishes in the lagging quadrant, the real estate index appears to be improving its relative momentum.
The Media and Energy indices are placed in the improving quadrant. Important Note: RRGTM charts show the relative strength and momentum of a group of stocks. In the chart above, they show relative performance against the NIFTY500 Index (broader markets) and should not be used directly as buy or sell signals.
(Disclaimer: The opinions expressed in this column are those of the author. The facts and opinions expressed here do not reflect the opinions of www.enomictimes.com.)
