The Indian stock market concluded the week on a cautious note, with both the Sensex and Nifty experiencing volatility amidst global uncertainties and anticipation of key domestic developments.

Nifty Technical Levels and Outlook

The Nifty settled at 24,853.15. According to analysts, the index's inability to maintain levels above 25,200 suggests a consolidation phase. Immediate support lies around 24,500, coinciding with its short-term moving average (20-DEMA). A breach below this level could trigger a further decline towards 24,100, potentially disrupting the ongoing positive trend. Conversely, a decisive breakout above 25,200 could reignite bullish momentum, paving the way towards the 25,600 level. Nagaraj Shetti from HDFC Securities noted that the daily chart displays a long bull candle, indicating a near-term higher bottom formation after a minor downward correction, maintaining the bullish pattern of higher tops and bottoms.

Rupak De of LKP Securities pointed out that the Nifty has been consolidating between 24,700 and 25,000 after finding support at the 21-day EMA. A breakout above 25,000 could lead to a fresh rally towards 25,250, while a break below 24,700 might invite more selling pressure. Dhupesh Dhameja from SAMCO Securities highlighted key support at 24,500, suggesting a "buy on dips" strategy as long as the Nifty holds above this level.

Sensex Technical Levels and Outlook

The Sensex ended at 81,721.08, reflecting similar investor caution. Kotak Securities' Shrikant Chouhan pinpointed 81,300 and 80,500 as key support levels for the Sensex, with 82,700 acting as immediate resistance. A successful breakout above 82,700 could propel the index towards 83,800. However, a fall below 80,500 could jeopardize the uptrend.

Bank Nifty

The banking index is considered a key indicator for the Nifty's directional movement. It has been consolidating for over a month, holding above its short-term support around 54,600 (20-DEMA). A breakout above 56,000 could provide the necessary impetus to test the 57,500 level. Choice Broking noted that a decisive close above 56,000 could unlock immediate targets of 58,000 and 59,800 in the short term, with key support levels at 54,000 and 53,800.

Market Strategy

Analysts recommend maintaining a positive bias unless the Nifty decisively breaks below 24,500, emphasizing stock selection. Sectors like banking, financials, energy, metals, and realty are favored, while a selective approach is advised for others. Traders are urged to maintain strict stop-loss levels and prepare for heightened volatility. Shrikant Chouhan of Kotak Securities anticipates a rate cut of another 75-100 bps by the end of FY26, citing low crude oil prices, an expected good monsoon, RBI rate cuts, and lower inflation as positive macro factors.

Additional Factors

• Global Cues: Keeping abreast of global developments and key domestic policy announcements is crucial for navigating the markets.
• Volatility: The volatility index India VIX has cooled off, indicating a decline in market volatility.
• FII Inflows: An increase in Foreign Institutional Investor (FII) inflows suggests positive sentiment towards India.
• Technical Indicators: Technical analysis suggests a mixed outlook, with some indicators pointing to bullish signals and others suggesting caution.

Disclaimer: The views and recommendations provided are those of individual analysts and broking companies and not of this AI assistant. Investors are strongly advised to consult with certified experts, consider their individual risk tolerance, and conduct thorough research before making any investment decisions. Market conditions are subject to rapid change, and individual circumstances may vary.