The benchmark Nifty index has continued its downward trajectory, extending its losing streak for the fourth consecutive week. This persistent weakness can be attributed to a combination of factors — the absence of strong positive triggers, Q1 earnings from key corporates coming below expectations, and lingering uncertainty on the global trade deal front, all of which have dampened investor sentiment.
During the week, the index made a feeble attempt to rebound from the crucial support zone; however, the recovery lacked conviction and fizzled out quickly. On Wednesday, Nifty managed to close above its 20-day EMA, briefly reviving hopes of a turnaround. But the optimism was short-lived, as renewed selling pressure dragged the index back into negative territory.
The bearish undertone deepened on Friday, when the index decisively broke below two critical technical levels — the 50-day EMA and the 61.8% Fibonacci retracement of its recent upswing from 24473 to 25669. This breakdown not only reflects fading bullish momentum but also signals growing nervousness among market participants. With no clear positive cues on the domestic or global front, the market appears vulnerable to further consolidation or downside in the near term.
Talking about crucial levels, the 100-day EMA zone of 24600-24550 will act as immediate support for the index. Any sustainable move below the level of 24550 will lead to further correction upto the 24200 level. While on the upside, the 20-day EMA zone of 25100-25150 will be the crucial hurdle for the index.
Bank Nifty View:
The banking benchmark index, Bank Nifty, has relatively outperformed the broader frontline indices by closing the week on a mildly positive note, even as the overall market sentiment remained weak. Throughout the week, the index attempted to stage a recovery from lower levels, supported by selective buying in heavyweight banking names. However, it once again struggled to surpass the horizontal trendline resistance (57300-57400), which continues to act as a formidable barrier for the bulls.
Despite the intraday attempts to break out, the index faced selling pressure near resistance zones and eventually retreated from higher levels. By the end of the week, Bank Nifty settled near the 56500 mark, registering a modest gain of 0.44%.
From a technical standpoint, the weekly price action has resulted in the formation of a Gravestone Doji candlestick pattern, which typically signals indecision in the market and a potential reversal when it appears after an up-move. This pattern, coupled with the repeated failure to breach resistance, suggests caution in the near term, with the need for a strong breakout to resume upward momentum.
Going ahead, the zone of 57300-57400 is likely to continue to act as a crucial hurdle for the index. While on the downside, the zone of 56200-56100 will act as important support for the index as it is the confluence of the 50-day EMA and prior swing low. Any sustainable move below the level of 56100 will lead to further selling pressure in the index upto the level of 55500 in the short term.
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