Indian equity benchmarks concluded the previous trading week with minor declines, as investors navigated a complex mix of domestic macroeconomic signals, a weakening rupee, and unresolved questions surrounding a potential India-US trade agreement. This cocktail of factors fostered a cautious atmosphere, leading to selling pressure across most sessions.
A Volatile Week with a Late-Stage Recovery
Despite the prevailing negative sentiment, a notable rebound in the final trading session helped pare some of the losses. This recovery was fueled by value-based buying and renewed interest from foreign portfolio investors (FPIs). However, the bounce-back wasn't sufficient to push the indices into positive territory for the week. The S&P BSE Sensex slipped 0.40% to settle at 84,929, while the Nifty50 declined 0.31% to end at 25,966.
According to Osho Krishan, Chief Manager of Technical and Derivative Research at Angel One, the market's ability to defend crucial technical support levels during the volatility demonstrates underlying resilience. This, he suggests, keeps the possibility of a near-term rebound on the table, even amidst broader uncertainty.
Nifty Technical Outlook: Inside Bar Pattern and Key Levels
Krishan pointed out that the late-week recovery was technically significant as it helped the Nifty protect its pivotal 50-day Exponential Moving Average (50-DEMA). He noted that the weekly chart formed an Inside Bar pattern, which typically indicates a phase of consolidation and a lack of a clear directional trend.
"The index has encountered constraints on making any substantial moves, as evidenced by the Inside Bar formation on the weekly chart," Krishan stated. He added that while the Nifty has moved above the 20-DEMA, it continues to face resistance near the 20 and 50-DEMA zones, implying that technical hurdles are not fully cleared.
From a support perspective, Krishan identified the 25,850–25,800 zone as a crucial cushion for any intermediate dips. He emphasized that the 25,700 level remains a sacrosanct support that has held firm over the past two weeks. For the bulls to regain meaningful control, he stated that a decisive move above the 26,050–26,100 resistance is necessary. Such a breakout could potentially open the path towards the 26,300–26,325 zone in the near term.
Angel One's Technical Stock Picks for the Week
Alongside the broader market analysis, Osho Krishan highlighted two stocks showing promising technical reversal setups from key support areas.
CEAT Ltd: Krishan observed that CEAT's stock has seen a sharp correction, bringing it near its 100-DEMA support. The latest trading session witnessed a price surge with higher volumes around this level, which also coincides with the neckline of a prior breakout pattern. Technical indicators are turning positive, with the 14-day Relative Strength Index (RSI) showing a bullish crossover and the Moving Average Convergence Divergence (MACD) hinting at a turnaround.
Angel One's Recommendation: Buy around ₹3,900. Place a stop loss at ₹3,650. Target range: ₹4,200–4,300.
Godrej Consumer Products Ltd: This stock has rebounded from the ₹1,120 support zone and has climbed above its 200-day Simple Moving Average (SMA), signaling the beginning of a counter-trend move. The MACD histogram is now above its signal line, indicating building buying momentum, while key Exponential Moving Averages (EMAs) are nearing a positive crossover.
Angel One's Recommendation: Buy around ₹1,170. Place a stop loss at ₹1,120. Target range: ₹1,230–1,250.
Krishan advised investors to adopt a pragmatic approach in the current market setup. He stressed the importance of monitoring key sectoral themes amid volatility, staying updated on global developments that could act as catalysts, and watching currency market movements for clues on the near-term direction.
Disclaimer: The views and recommendations above are those of individual analysts or broking companies, and not of Mint. Investors are advised to consult certified experts before making any investment decisions.
