Week Ahead

Benchmark indices maintained their downtrend for the second consecutive week (that ended on January 17), falling nearly 1 percent as market participants remained cautious.

The BSE Sensex declined 760 points to 76,619, and the Nifty 50 dropped 228 points to 23,203, while the broader markets outperformed frontline indices, with the Nifty Midcap 100 and Smallcap 100 indices ending flat with a positive bias. Technology, private banks, FMCG, auto, and pharma stocks were under pressure, but PSU banks and oil & gas scrips bucked the trend.

In the coming week, the market is expected to remain consolidative and volatility may be elevated with major focus on Trump's policy decisions and corporate earnings. Stock specific action will also be seen given the ongoing quarterly results season.

Technically, the Nifty 50 remained weak as it was trading well below all key moving averages on the daily charts, and also below the 10, 20, and 50-week moving averages, along with negative bias in the momentum indicators. The index formed a Doji candlestick pattern on the weekly charts, indicating indecision among bulls and bears.

Hence, consolidation is expected to continue in the coming week with 23,050 (last week's low) acting as a key support area. A decisive fall below it can trigger major selling in the market, pushing it towards 22,800. On the higher side, 23,400 can be the immediate resistance (coincides with the previous week's high and the 50-week EMA) — above that, 23,700-23,900 are the levels to watch.

The weekly options data indicated that the Nifty 50 may remain in the broad range of 22,500-24,000, with immediate resistance at 23,500 and support at 23,200-23,000 levels.