The markets witnessed a sharp and persistent decline over the week, ending decisively in the negative. After attempting to stabilize early on, the Nifty faced sustained selling pressure that intensified in the latter half of the period.

The index traded in a wide range of 1,191.80 points, oscillating between 24,303.80 and 23,112.00. Volatility remained elevated, with the India VIX surging 13.91% during the week after a nearly 45% rise in the previous week, reflecting heightened risk perception amid escalating geopolitical tensions. By week’s end, the Nifty registered a net loss of 1,299.35 points (-5.31%).

Structural outlook and key supports
From a structural perspective, the market has entered a technically vulnerable phase. The Nifty decisively violated its 100-week moving average at 24,448, which had previously served as strong intermediate support. This breakdown has altered the medium-term structure and shifted the bias toward the downside unless the index quickly reclaims this level.

With volatility rising sharply and geopolitical developments remaining the primary trigger, any rebound attempts are likely to encounter strong resistance near 24,400-24,500, coinciding with the breached 100-week MA. A sustained move back above this area is required to stabilize sentiment; failing which, the markets may remain prone to continued corrective pressure.

Immediate market outlook
Looking ahead, the markets may start the coming week on a cautious note, as participants continue to react to global developments and elevated volatility. Immediate resistance levels are placed at 23,500 and 23,750, while supports are seen at 23,000 and 22,710.

Technical indicators
The weekly RSI stands at 29.06, slipping into oversold territory and forming a fresh 14-period low. While there is no visible divergence, the oversold reading suggests that intermittent technical pullbacks cannot be ruled out.

The weekly MACD remains below its signal line, continuing in negative territory and reflecting persistent bearish momentum. The week has also resulted in the formation of a large bearish candle, confirming strong selling pressure.

Pattern analysis of the weekly chart shows that the index has broken down from a broad consolidation pattern that had been developing near the highs, followed by a failure to hold above the 50- and 100-week moving averages. The Nifty has closed below the lower Bollinger band. A temporary pullback inside the band is likely, but the current price action keeps the technical structure weak.

Strategy for the coming week
Given the sharp rise in volatility and the violation of key supports, market participants should adopt a cautious and defensive approach in the coming week. Fresh aggressive buying should be avoided until the index shows signs of stabilizing above the recently broken support levels.

Traders should focus on protecting gains, maintaining disciplined stops, and taking a stock-specific approach rather than aggressive index-based positioning. Until volatility cools off and the Nifty reclaims the 100-week moving average, risk management and selective participation should remain the preferred strategy.

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

Leading quadrant: Energy, Financial Services, PSE, Pharma, Nifty Bank, PSU Bank, Infrastructure, and Metal indices. Though most may continue to outperform, all except Pharma, PSE, and Energy are slowing on relative momentum.

Weakening quadrant: Nifty Services, Midcap 100, and Auto indices. These may see individual stock-level strength but are likely to lag overall.

Lagging quadrant: Nifty IT and Realty indices continue to underperform, while FMCG shows improving relative momentum.

Improving quadrant: Nifty Media is rotating strongly inside this quadrant, indicating continued improvement in relative momentum.

Important note: RRG™ charts illustrate the relative strength and momentum of a sector against the Nifty 500 and should not be used directly as buy or sell signals.