Dalal Street Week Ahead: Nifty near breakout as resistance seen at 25,100; PSU banks, energy lead sectoral momentum

ETMarkets.com
Live Events
ETMarkets.com
ETMarkets.com
(You can now subscribe to our
(You can now subscribe to our ETMarkets WhatsApp channel
After consolidating for two weeks, the Nifty finally appeared to be flexing its muscles for a potential move higher. Over the past five sessions, the Nifty traded with an underlying positive bias and ended near the week's high point while also attempting to move past a crucial pattern of resistance. The past week saw the Index oscillating in the 527-point range, which was in line with the previous weeks. The volatility also cooled off; the India VIX came off by 9% to 14.63 on a weekly basis. While staying largely in a range trading with a positive bias, the headline Index closed with a net weekly gain of 252.35 points (+1.02%).Over the past couple of weeks, the Nifty has traded in a well-defined range created between 24,500-25,100 levels. This would mean that the markets would remain devoid of directional bias unless they take out 25,100 on the higher side or violate the 24,500 level. Despite visibly strong undercurrents, staying reactive to the markets rather than getting predictive would be prudent. Although there are heightened possibilities of the Nifty taking out the 25,100 level, we must consider it as resistance until it is taken out convincingly.The coming week is set to see a stable start; the levels of 25150 and 25400 are likely to act as resistance points. The supports come in at 24,800 and 24500. The trading range is expected to get wider than usual.The weekly RSI is 60.94; it continues to remain neutral and does not show any divergence against the price. The weekly MACD is bullish and remains above its signal line. A strong white candle emerged; this shows the bullish trend that the markets had during the week.A pattern analysis of the weekly chart shows that the Nifty resisted the upward rising trendline that began from the low of 21,350 and joined the subsequent rising bottoms. The Nifty has attempted to penetrate it after resisting it for a couple of weeks.Overall, the coming week may see the markets trading with an underlying bullish bias. However, for this to culminate in a good trending move, the Index will have to take out the 25,100-25,150 zone convincingly on the upside. Until this happens, the markets may continue to consolidate in a broad trading range. Unless there is a strong move that surpasses the 25,100-25,150 zone, one must consider this level as an immediate resistance point. Some pockets have run up too hard over the past few days; one must also focus on protecting gains at current levels rather than chasing the up moves. Fresh purchases must be kept limited in stocks with strong technical setups and the presence of relative strength. A cautiously positive approach is advised for the coming week.Relative Rotation Graphs (RRG) show that the Nifty PSU Bank Index continues to build on its relative momentum while staying inside the leading quadrant. It may continue outperforming the markets relatively. The Infrastructure, Consumption, and PSE Index are also inside the leading quadrant but are seen giving up on their relative momentum.The Nifty Bank Index has rolled inside the weakening quadrant. The Nifty Services Sector, Financial Services, and Commodity Indice are also inside the weakening quadrant. Individual performance of components from these groups may be seen, but overall relative performance may slow down over the coming weeks.The Nifty FMCG Index has rolled inside the lagging quadrant. The Nifty Metal and Pharma Indice are languishing in this quadrant. The Nifty IT index is also inside the lagging quadrant, but is seen in a strong bottoming-out process while improving its relative momentum.The Nifty Energy, Media, Realty, and Auto Indices are inside the improving quadrant and may continue improving 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, is a Consulting Technical Analyst and founder of EquityResearch.asia and ChartWizard.ae and is based in Vadodara. He can be reached at milan.vaishnav@equityresearch.asia

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Business Standard

an hour ago

• Business Standard

Street Signs: Nifty's new conquest, SME bankers under regulatory scalpel

Samie Modak Khushboo Tiwari Mumbai Listen to This Article The 25K wall falls:Nifty's new conquest The Nifty 50 index broke new ground, closing 'decisively' above the 25,000 mark for the first time since September 2024. Market observers interpret this as a bullish signal, potentially paving the way for the index to reach record highs. Devarsh Vakil, head of prime research at HDFC Securities, noted that Nifty's breakout above 25,000 marks a positive short term trend. Immediate resistance is at 25,222, while support has shifted to 24,900. Dhupesh Dhameja, derivatives research analyst at Samco Securities, added that a firm close above 25,250 could boost upward momentum, targeting 25,500. Unless the

Business Standard

3 hours ago

• Business Standard

Markets may dip as US strikes on Iran stoke oil fears, global volatility

Indian markets may open lower on Monday due to fears of crude oil disruption from the West Asia though domestic institutional investors may support valuations Sundar Sethuraman Mumbai Listen to This Article Investors may have to brace for a spike in volatility on Monday following the US military's direct involvement in the Israel–Iran conflict over the weekend. Experts believe benchmark Sensex and Nifty may correct 1–1.5 per cent if oil prices surge and Asian markets fall due to the widening of the West Asia conflict. However, domestic institutional investor (DII) buying could cushion the fall. Last week, the domestic markets had gained over 1.5 per cent even as hostilities between Iran and Israel escalated. On Saturday, President Donald Trump announced targeted strikes on three of Iran's key nuclear facilities—Fordow, Natanz, and Isfahan—using

Hans India

5 hours ago

• Hans India

Sensex, Nifty outlook for June 23–27: Bullish breakout ahead?

The Indian stock market wrapped up a bullish week (June 16–20), with the Sensex closing at 82,408.17 and the Nifty 50 ending at 25,112.40 — both comfortably above key pivot levels. The rally was powered by strong FII inflows, easing RBI provisioning norms for infrastructure loans, declining bond yields, and a dip in volatility and gold prices. Market sentiment got a further boost as the Reserve Bank of India relaxed its earlier draft rule, now requiring just 1% provisioning for under-construction infra loans versus the proposed 5%. This move notably lifted banking and financial stocks. Additionally, easing tensions in the Middle East added to optimism. While geopolitical concerns remain, the US President's statement to delay military involvement in the Israel-Iran conflict hinted at potential diplomatic engagement. Market Performance Recap: Sensex rose 1.5% this week. Nifty 50 added 1.3%. FIIs invested ₹8,709 crore; DIIs added ₹12,635 crore. Global indices, however, underperformed, with the Dow down 1% and the Nasdaq flat. Key Drivers for Next Week (June 23–27): US Economic Data: Focus on GDP and PCE inflation. Geopolitical Developments: Monitoring Middle East tensions and the US-China 90-day truce deadline. Monsoon Progress in India FII/DII Activity and Crude Oil Prices Monthly Derivatives Expiry Volatility Technical Outlook: Resistance: 25,250. A breakout may lead to 25,600–25,800. Support: 24,850–24,800 zone. Breakdown below 24,600 may trigger further correction. Indicators: Nifty is trading above both 21-day and 55-day EMAs, signaling strong momentum. Investor Strategy: Experts advise a stock-specific approach. Look for strength in banking, auto, realty, and IT sectors. Avoid heavy exposure to FMCG, energy, and mid/small caps until clearer signals emerge. Traders are also urged to be cautious of false breakouts near 25,200, especially ahead of monthly expiry. Monitor both global developments and technical resistance levels closely.