Dalal Street Week Ahead: Nifty Expected to Consolidate Before Next Move

Indian markets experienced a week of minor corrections, with the Nifty entering a consolidation phase characterized by a slight downward bias, ultimately closing the week in negative territory. The index fluctuated within a 485-point range, hitting a high of 26,178.70 and a low of 25,693.25.

Despite support from the Federal Reserve's 0.25% rate cut and a pause in the deterioration of market breadth, the Nifty encountered resistance near its recent peak. The India VIX decreased by 2.01% to 10.11, indicating continued market complacency and reduced demand for hedging. The Nifty concluded the week with a modest loss of 139.50 points, a decline of 0.53%.

While the overall structure of the Nifty remains bullish, the index is currently navigating a crucial decision point. It continues to trade above the falling trendline, facing resistance in the 26,150–26,200 range. The current price action suggests hesitation in decisively overcoming this resistance level.

The absence of clear catalysts, such as progress on the US-India trade deal, contributes to the market's inertia. While the Fed's dovish approach could provide medium-term benefits, the index appears to be in a technical pause within an existing uptrend. A definitive move above 26,200 is necessary to confirm a new breakout and continue the trend.

Looking ahead, the coming week may begin with a cautious or flat market. Initial resistance levels are projected at 26,200 and 26,300, with a stronger resistance level near 26,550, coinciding with the upper Bollinger band. On the downside, immediate support lies at 25,750, followed by the 25,600 area.