This week, the Indian stock market experienced notable turbulence, largely influenced by the U.S. Federal Reserve’s decision to reduce interest rates by 0.25%, marking its third cut this year. However, Fed Chair Jerome Powell’s cautious stance, signaling only two more quarter-point rate cuts in 2025, tempered market optimism. The anticipation of limited rate cuts and persistent inflation pressures led to a 3-5% market correction across key indices.
Nifty 50’s Technical Resilience Amid Market Correction
The Nifty 50 showed technical resilience, forming an inverted head and shoulders pattern, with a neckline at 24,200. This formation hinted at a potential move towards the 25,000 – 25,300 zone. The index briefly reached 24,950 before profit booking brought it down as the week ended.
Throughout the week, Nifty 50 traded in a volatile range between 23,500 and 25,000, with profit booking dominating sectoral movements. Current Open Interest (OI) data indicates that the index is in the oversold zone at 0.75, which could lead to short-covering if it sustains above the 23,300-23,500 range heading into the monthly expiry.
Market Outlook for the Upcoming Week
For the week ahead, a range of 23,300 – 24,500 is expected for the Nifty 50. A breakout beyond this range could indicate a fresh trend, with targets of 24,000 – 24,200 for monthly expiry. Traders should watch for a decisive move in either direction to signal the next trend.
Bank Nifty’s Struggles and Support Levels
The Bank Nifty index mirrored the volatility of the Nifty 50, facing significant profit booking and a steep 5% decline, falling nearly 3,000 points to close at 50,700. Despite a positive start on Monday, consistent selling pushed the Bank Nifty lower, testing resistance at 54,000 before bottoming at 50,800.
For the coming sessions, support is observed at 49,500, while resistance is seen at 52,000. The index’s direction will depend on whether it sustains within this range.
Conclusion: Bearish Bias Prevails
Both the Nifty 50 and Bank Nifty indices closed below their weekly support zones, signaling a generally bearish sentiment. Investors are advised to closely monitor key support and resistance levels for potential trading opportunities in the upcoming sessions.
Stocks to Watch
- Amber Enterprises India
- Buy Range: ₹6,100 – ₹6,130
- Target Price: ₹6,500
- Stop Loss: ₹5,750
- RCF
- Buy Range: ₹168 – ₹172
- Target Price: ₹185
- Stop Loss: ₹160
- Godrej Industries
- Buy Range: ₹1,100 – ₹1,120
- Target Price: ₹1,175
- Stop Loss: ₹1,070
Disclaimer: The views and recommendations provided are based on analysis from individual analysts or brokerage firms.
