Nifty consolidates near resistance; index trend uncertain, earnings action and cautious trading likely ahead.

The Nifty 50 ended the week on a slightly negative note after witnessing range-bound and sideways movement. Despite multiple intraday attempts, the index failed to decisively break above the critical 25,100–25,350 resistance zone. Throughout the week, it traded within a narrow 276-point range, reflecting both consolidation and a pause in upward momentum after its recent rally from April lows. The India VIX fell further, indicating continued complacency and reduced volatility, as investors await a clear directional move.

India VIX, a key volatility gauge, declined by 3.60% to 11.39, its lowest in recent weeks. This persistent low volatility environment suggests that market participants remain complacent or undecided about future moves, a common feature in consolidation phases.

Technical Indicators

1. Relative Strength Index (RSI): The weekly RSI stands at 56.54. It remains neutral, showing no divergence against price, but it has formed a fresh 14-period low, a subtle bearish sign that points to declining momentum..

2. Moving Average Convergence Divergence (MACD): The MACD continues to stay above its signal line on the weekly chart, maintaining a positive crossover. This reflects underlying strength, although with weakening momentum.

3. Candlestick Formation: A typical 3 Black Crow pattern is visible on the Weekly Chart, indicating potential breakdown extending in the upcoming weeks.

Chart Structure & Pattern Analysis

Nifty had previously attempted a breakout above a well-defined rising channel but has since slipped back below the upper bound. The 25,100–25,350 zone has now turned into a resistance region where selling pressure is emerging. The failure to sustain above 25,150 suggests that this area remains a significant hurdle.
Support levels are seen at 24,750, followed by 24,380. A sustained breach below these levels could introduce further weakness in the market. On the upside, a breakout above 25,350 with a closing confirmation is necessary to resume the medium-term bullish trend.
Despite the current consolidation, the index remains above both the 20-week and 50-week moving averages, indicating that the broader uptrend remains intact. However, the recent action shows that the market is lacking fresh directional conviction in the short term.

What To Watch Next Week?

1. Breakout or Breakdown?
The key level to watch on the upside is 25,350. A decisive weekly close above this may pave the way for further gains, with potential targets near 25,750 and beyond. On the downside, any sustained move below 24,750 can lead to a short-term trend reversal toward 24,380.

2. Sector Rotation
While frontline indices consolidate, stock-specific moves are likely to dominate. Sectors such as PSU banks, midcap auto, and IT services have shown relatively better strength. FMCG and pharma remain under pressure due to valuation concerns and weak earnings momentum.

3. Global Cues
US Fed Commentary and economic data like GDP growth, inflation, and jobless claims. Any signal of a delay in rate cuts could impact global risk sentiment.
Rising crude prices and a weakening rupee may pose headwinds to India’s macro stability.

4. Earning Season
With Q1FY26 earnings underway, stock-specific volatility is likely to increase.
Keep a watch on Financials, Autos, and IT majors, where results could influence short-term sentiment.

Conclusion

The Nifty is currently at a critical juncture. Despite holding above key medium-term moving averages and maintaining its broader trend, the near-term momentum has stalled.
The market awaits a clear breakout above the resistance zone to resume its upward trajectory. Until then, range-bound action is likely to persist.
With global uncertainties, earnings reactions, and valuation pressures all in play, it’s a time to stay nimble, disciplined, and focused on opportunities in individual stocks rather than taking aggressive index-wide bets.