The Nifty 50 extended its decline for a second consecutive week, falling 0.47%, or 114 points, but the index traded in its narrowest weekly range of 2026 as investors showed little conviction in either direction.
The index moved within a 334.5-point range during the week. It also broke a pattern of lower highs that had persisted for 12 trading sessions, found support near a rising trendline from the April low and recovered to close above 24,250.
The technical setup points to a market consolidating between key support and resistance levels. The Nifty's ability to hold above support near 24,000 while overcoming resistance around 24,371 could determine whether the next move extends the recovery or brings renewed weakness.
Weekly Recovery
The weekly chart formed a bearish-bodied candle with a long lower shadow, reflecting buying interest after the index came under pressure during the week.
After recording lower highs for 12 consecutive sessions, the Nifty found support near the rising trendline and the 61.8% Fibonacci retracement level of its previous upswing. It subsequently recovered and closed above its 10-week moving average.
The index remains above its 50-day and 100-day moving averages, with both trending higher. However, its recent recovery has faced resistance near the eight-day exponential moving average.
Key Levels
The Nifty faces immediate resistance at 24,273, which coincides with the eight-day exponential moving average. A sustained move above that level could take the index towards the 20-day moving average at 24,371.
A close above 24,371 would be important for extending the short-term recovery, according to the technical analysis.
On the downside, the 50-day moving average at 24,182 is the first support level. The level also coincides with the low of the Aug. 20 Doji candle, making it an important near-term marker.
If the index fails to hold that level, it could move towards trendline support and the 61.8% retracement level near 24,060. The broader support zone lies between 23,960 and 24,060, while a break below 23,960 could indicate further weakness.
Market Outlook
The current setup suggests traders may face difficulty taking aggressive directional positions unless the Nifty sustains above 24,371.
The index could continue to trade within its established range, with 24,371 acting as the immediate upside hurdle and the 23,960-24,060 zone providing critical support.
"The current setup suggests that aggressive directional positions may remain challenging until the Nifty sustains above the 20 DMA at 24,371," the analysis said.
Stock Watch
Nippon Life India Asset Management emerged as a stock to watch after breaking out of a seven-week consolidation and closing at a record high.
The move came with higher trading volumes, while the stock's relative strength line also reached a new high. Its short- and long-term moving averages continue to trend higher, according to the analysis.
The stock has support from its 10-week moving average, while its weekly MACD has generated a bullish crossover. Other momentum indicators also remain supportive.
A sustained move above Rs 1,250 could open the way towards Rs 1,360 and then Rs 1,400, the analysis said. It placed the stop loss at Rs 1,160.
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