Last week, the outlook was that a close below 25,530 would likely lead to further corrections, while a reversal from the current downturn was expected only if the market closed above 25,880. On the first day of the week, although the 25,530 level was lost in the initial hours, the market recovered significantly by closing time to end on a strong note. The following day, even though the 25,880 level was breached in the opening hours, it retraced to close near 25,700. Subsequently, trading hovered around this level for two days. Although it touched 25,873 by the end of the week, it eventually closed at 25,700. Let us look at the expectations for the market in the coming days.
Nifty Outlook Nifty closed last week just above the crucial weekly support of 25,693. In the coming days, maintaining a closing basis above 25,585 is critical for Nifty. If this level is lost, the support levels at 25,551-25,318 will become significant. Losing this support would lead Nifty to test another major support at 25,070. On the upside, the level to watch in the coming days is 25,818. A close above this would provide fresh energy to the market. Following this, the resistance levels at 26,210-26,373 will be important.
While the Dollar Index remaining below the major resistance zone of 99.45 is positive for us, the Rupee standing above the 89.74 mark causes some concern. It remains to be seen if it will reach and close above 91.20 in the coming days. Crude Oil has moved up in recent days by holding the major support of 4,998 and has settled at 5,423, just below the next major resistance area of 5,512. A close above 5,512 in the coming days would help it gradually advance to the 5,745-5,903-6,187 levels. Therefore, Indian stock market participants will need to watch Crude Oil closely in the coming days.
Sector Indices Outlook Let us examine the indications given by major sector indices:
Nifty Auto: Currently at 27,596, the Auto Index sits just above the strong support zone of 27,476-27,013. Holding this level would mark the beginning of the next bull movement, targeting levels of 30,053-33,534.
Bank Nifty: Another major sector, Bank Nifty, is at 60,095, just below the crucial “Lakshman Rekha” of 60,284. The rally will continue if it closes above 60,284. However, if this fails, a correction to 58,712-58,000-57,157 should be expected.
Nifty Commodities: Currently at 9,620. Breaking the nearest resistance at 9,749-9,787 would open targets of 10,185-11,247. Support lies within the 9,065-8,875 zone.
Nifty Consumption: Currently at 11,906. The selling pressure encountered from the 12,230-12,330 zone continues. Hope currently rests on the support within 11,766-11,619.
FMCG: The sector continues its decline. The FMCG Nifty Index is at 52,142 and is attempting to cross the nearest resistance zone of 52,221. If succeed, it opens the possibility of a relief rally. Otherwise, one may have to wait for the next support in the 44,308 zone.
Infra Index: The correction that started from 9,793 has now reached 9,252. The support within the 9,039-8,982 zone is the current foothold.
Nifty IT: Currently at 39,086. Trying to advance on the strength of the 38,080-37,573 support area, the IT Index faces a major challenge at 39,531. Above this, targets of 40,604-41,113 will open up. The subsequent major resistance zone lies between 42,840-43,432.
Metal Index: Showed a good rally last week and stands at 11,600 on the strength of support at 11,208-11,036. If this support is held, the targets will be 12,650-13,078.
Pharma Index: Standing at 22,217, it is facing selling pressure that started from the critical level of 23,725, which could continue towards the 20,900 level. Another resistance zone has formed within 23,021-23,492. The Pharma Index currently sits within the nearest support zone of 22,320-22,105; if this is lost, the next support zone is at 21,465-21,261.
Key Triggers The major topics of discussion in the market in the coming days will be the earnings announcements from the last quarter, expectations regarding the upcoming budget, and potential trade deals with the European Union and various other countries. Additionally, Trump may continue in his role as an “antagonist.”