This week, the Indian stock market displayed remarkable resilience amidst escalating geopolitical concerns between India and Pakistan. While there was initial consolidation, the week concluded with only a slight drop. The Nifty index fluctuated within a narrow band of 23,800 to 24,600, ultimately closing the week with a net loss of 338 points. Despite this pullback, the market maintained crucial support levels, although volatility spiked significantly, as indicated by the India VIX, which surged by 18.49% to finish at 21.63.

Market Overview

In our earlier insights, we identified the 24,600-24,700 range as a pivotal technical resistance area. This range aligns with the 61.8% Fibonacci retracement of the broader market decline, underscoring its critical importance. Furthermore, the 200-day Exponential Moving Average (EMA), positioned around 23,600, continues to serve as a vital support zone.

• Current Nifty Levels:
  • Support: 23,600
  • Resistance: 24,600-24,700

As the Nifty index remains beneath the 24,500-24,700 resistance range, a prudent outlook is advised. A decisive breakout above this range is necessary to instigate fresh bullish momentum. Investors are encouraged to stay alert to ongoing geopolitical developments that could impact market dynamics.

Insights on Bank Nifty

Similarly, the Bank Nifty experienced profit-taking, resulting in a 2.5% decline for the week, closing near the 53,000 support level. Immediate support is identified at 53,000, while resistance is observed around 56,000.

• Immediate Bank Nifty Levels:
  • Support: 53,000
  • Resistance: 56,000

Looking ahead, if the Bank Nifty maintains its position above 53,000, it could target a recovery towards the 54,000-54,500 levels. However, a strong close above these points is necessary before adopting a more optimistic trading strategy.

Conclusion and Recommendations

Both the Nifty and Bank Nifty have successfully closed above their respective monthly support levels: 23,600 for Nifty and 53,000 for Bank Nifty. Nevertheless, the immediate resistance levels at 24,600-24,700 for Nifty and 56,000 for Bank Nifty will play a crucial role in shaping future market movements.

• Trading Strategy:
  • Fresh long positions should only be considered following a clear breakout above these resistance zones.
  • Traders and investors are advised to maintain a cautious approach while closely monitoring both technical indicators and geopolitical developments in the upcoming week.

Weekly Stock Picks

For those looking to make strategic moves in the market, consider the following recommendations:

• Buy HAL: Entry at ₹4,500-4,525; Stop Loss at ₹4,300; Target Price of ₹4,800.
• Buy JSW Steel: Entry at ₹955-960; Stop Loss at ₹940; Target Price of ₹990.
• Buy Sun Pharma: Entry at ₹1,725-1,745; Stop Loss at ₹1,675; Target Price of ₹1,830.

As always, ensure to conduct your own research and stay updated on market conditions.