• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Week Ahead: NIFTY Stays In Technically Challanging Environment; Price Action Against These Levels Crucial
Stock

Week Ahead: NIFTY Stays In Technically Challanging Environment; Price Action Against These Levels Crucial

by May 11, 2025
by May 11, 2025 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

Amid ever-increasing uncertainties on the global front and similarly rising geopolitical tensions between India and Pakistan, the Indian equity markets demonstrated strong resilience. They consolidated before ending the week on just a modestly negative note. The trading range remained modest; the Nifty oscillated in a 590-point range. While the markets defended their key support levels, the volatility surged. The volatility barometer, the India Vix, spiked 18.49% to 21.63 on a weekly basis.. The headline index finally closed with a net weekly loss of 338.70 points (-1.39%).

A few important things to note from a technical perspective. The 200-DMA is at 24044; the 50-week MA is at 23983. This makes the zone of 23950-24050 a very important support zone for the Nifty. So long as the Index is able to defend this zone, it will continue consolidating in a defined range. Incremental weakness would creep in only if the 23900 level is violated decisively. On the higher side, as evident from the charts, the markets have continued to resist the rising trendline resistance. From now on, the Nift’s behavior vis-à-vis the zone of 23950-24050 would be crucially important to watch; the Index’s ability to defend or not defend this zone will dictate the trend over the coming weeks.

The levels of 24350 and 24600 are expected to act as probable resistance points in the coming week. The supports are at 23900 and 23630.

The weekly RSI is 54.36; it stays neutral and does not diverge against the price. The weekly MACD is bullish and stays above its signal line. A bearish engulfing candle has emerged. Its emergence near a pattern resistance adds credibility to the resistance placed near 24500-24600.

The pattern analysis of both daily and weekly charts shows that the Nifty has traded quite on the expected lines and within the analyzed range. It has continued resisting the rising trendline resistance near 24500-24600; it has so far defended the key that is created between the 200-DMA and the 50-week MA. The markets would weaken only if they violate the crucial 23900 level; so long as this point stays defended, we can expect the markets to consolidate in a defined range.

Based on the overall technical structure, it is likely that the markets will not see any immediate upward trend. While if the markets end up breaching the 23900 level remains to be seen, it is doubtful that they will initiate any sustainable trending upmove and move past the 24500 levels soon. The hedging activity and the cost of hedging have increased; this is evident from Vix, which has significantly risen over the past few days. While the Nifty has defended the key support levels so far, it remains in a technically challenging environment. It is strongly recommended that the market participants adopt a defensive approach by focusing on the low beta stocks and the stocks with improving relative strength. Staying low on leveraged positions, a continued cautious outlook is advised for the coming week.

Sector Analysis for the coming week

In our look at Relative Rotation Graphs®, we compared various sectors against the CNX500 (NIFTY 500 Index), representing over 95% of the free-float market cap of all the listed stocks. 

Relative Rotation Graphs (RRG) show that the Nifty PSE Index has rolled inside the leading quadrant. Infrastructure, Nifty Bank, PSU Bank, FMCG, Consumption, Commodities, and the Financial Services Indices are also inside the leading quadrant. These groups are likely to outperform the broader Nifty 500 Index relatively.

The Nifty Metal Index has rolled inside the weakening quadrant. This may cause the sector to slow down and give up on its relative performance. The Services Sector index also remains in this quadrant.

While the Nifty IT Index continues to languish in the lagging quadrant, the Auto and the Realty Indices are sharply improving their relative momentum against the broader markets while staying inside this quadrant.

The Nifty Midcap 100 index has rolled inside the improving quadrant; may see its relative performance bettering over the coming days. The Media and the Energy Indices are also inside this quadrant, and may continue seeing improvement in their relative performance against the broader markets.

Important Note: RRG™ charts show the relative strength and momentum of a group of stocks. In the above Chart, they show relative performance against NIFTY500 Index (Broader Markets) and should not be used directly as buy or sell signals.  

Milan Vaishnav, CMT, MSTA

Consulting Technical Analyst

www.EquityResearch.asia | www.ChartWizard.ae

You Might Also Like
  • What Seasonality Charts Reveal About the Top Sectors to Watch Right Now!
  • Week Ahead: NIFTY Stares at Both Incremental Highs As Well As Consolidation At Higher Levels; Tread With Caution
  • AI Stocks and Their Impact on the Stock Market: Hype or Reality?
  • These SURPRISING Sectors are Showing Strength
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Cargo thieves are attacking the U.S. supply chain at alarming rates
next post
Fortnite applies to launch on Apple’s App Store after Epic Games court win

You may also like

Uncover the Week’s Key Stock Market Movements

March 22, 2025

Golden Cross Carries Some Little-Known Magic

February 10, 2023

The Market Breadth Indicator You Should Be Following

May 6, 2024

Can Walmart Weather the Storm?

February 23, 2023

Diving into Energy Investments: Uncover Hidden Gems Today!

June 16, 2025

Finding Wholesale Opportunities

July 7, 2023

Stock Market Volatility: Pain Points, Bright Spots, and Strategies

April 10, 2025

Small Caps and Semis — Their 2- and 7-Year Business...

March 15, 2023

AMD Stock Projection: Price Could Soar Over 50%

October 10, 2023

Here’s Why Growth Stocks Outperformed Last Week!

December 9, 2023

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Find Highest Probability Counter-Trend Setups

      June 25, 2025
    • Small-business AI use is lagging, but one firm is channeling Sherlock Holmes and knocking out ‘grunt work’

      June 25, 2025
    • Nvidia CEO Huang sells $15 million worth of stock, first sale of $873 million plan

      June 25, 2025
    • Shifting Tides in the Stock Market: A New Era for Bulls?

      June 24, 2025
    • How to Use Fibonacci Retracements to Spot Key Levels

      June 24, 2025

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 3,611 views
    • 2

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,893 views
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,586 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,548 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,427 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,148)
    • Investing (538)
    • Stock (2,631)

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 2

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Find Highest Probability Counter-Trend Setups

      June 25, 2025
    • Small-business AI use is lagging, but one firm is channeling...

      June 25, 2025
    • Nvidia CEO Huang sells $15 million worth of stock, first...

      June 25, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,148)
    • Investing (538)
    • Stock (2,631)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Growth Stocks Shine in Short-Covering Rally

    August 30, 2023

    Finding Emerging Leaders within Key Groups

    June 15, 2024

    Is the S&P 500 Forming a...

    May 8, 2024
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here