Indian stock markets may see volatility due to fresh escalations between the US and Iran over the past week. The US stated that it had forces positioned and was prepared to ensure freedom of navigation of the Strait. This development took place after Tehran announcing Strait of Hormuz closure following latest round of attacks.
The Nifty 50 staged a strong recovery from lower levels during the week, with technical analysts indicating that the index remains in a consolidation phase while continuing to attract buying interest near key support zones.
Analysts at Bajaj Broking believe the key short-term support for the Nifty is placed in the 23,400-23,600 zone, which coincides with the 61.8% Fibonacci retracement of the previous up move from 23,070 to 24,530 and a trendline connecting the April and June 2026 lows.
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According to the brokerage, a breakout above 24,350 will signal strength and resumption of up move towards 24,600 levels being the high of April 2026 and then towards 24,800 levels in the coming weeks being the trendline resistance joining the previous major breakdown area and 200 days SMA.
Nandish Shah, Deputy Vice President at HDFC Securities, said the index held firmly above its 50-day simple moving average (SMA) at 23,829 throughout the week, signalling sustained buying at lower levels.
"The immediate swing low of 23,805 and swing high at 24,530 remain crucial levels to monitor. Continued strength in midcaps and smallcaps points to healthy underlying market participation," Shah said.
"We believe that the short-term market texture is volatile and non-directional; hence, level-based trading would be the ideal strategy for traders," Amol Athawale, Vice President – Technical Research at Kotak Securities said.
Bank Nifty Outlook
For the Bank Nifty, Athawale said the 20-day SMA at 57,500 will serve as the immediate reference point for traders.
According to him, a move above 57,500 could push the index towards the 58,500-59,000 zone, while a fall below this level would weaken the ongoing uptrend, prompting traders to consider exiting long positions.
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Bajaj Broking noted that Bank Nifty formed its second consecutive bullish candlestick with a higher high and a higher low, indicating a continued pullback. The brokerage said the index also closed above Wednesday's gap-down area, reflecting improving strength in banking stocks.
The brokerage expects Bank Nifty to consolidate in the 56,500-58,700 range. A break below Wednesday's low of 56,550 could trigger further downside towards the 55,500-55,000 support zone.
Market Recap
Indian equity benchmarks rallied on Friday. But snapped their four-week gaining streak, their longest weekly gaining streak since the week ending Dec. 7. Both the NSE Nifty 50 and the BSE Sensex fell 0.25% and 0.22% respectively. On Friday, the NSE Nifty 50 rose 1.02% or 244.10 points to close at 24,206.90, while the BSE Sensex gained 1.08% or 827.57 points to end at 77,569.39.
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