Indian benchmark indices are expected to remain in a consolidation phase in the near term as escalating geopolitical tensions and weakening technical indicators keep investors cautious. Market experts believe the broader trend remains intact, but momentum has softened after US President Donald Trump’s latest remarks signalling the possibility of further military action against Iran.
With Nifty failing to hold intraday gains and slipping from key resistance zones, analysts say traders should closely monitor crucial support and resistance levels before taking fresh positions.
Nifty Faces Immediate Resistance At 23,350–23,425
According to Shrikant Chouhan, Head of Equity Research at Kotak Securities, Nifty is currently facing a significant hurdle at the 23,350 level.
“As long as the index trades below 23,350, weak sentiment is likely to continue. On the downside, the market could retest 23,100–23,050. A move above 23,350 could trigger a bounce towards 23,425, while further upside may lift the index to 23,500,” Chouhan said.
Market participants are closely watching whether Nifty can decisively reclaim this level, which could determine the next directional move.
Bajaj Broking Sees Breakout Above 23,425
Analysts at Bajaj Broking believe that 23,425 remains the most critical resistance zone for the benchmark index.
According to the brokerage, a sustained move above this level could signal a breakout from the ongoing consolidation pattern and open the door for further gains towards 23,550 and eventually 23,830.
The 23,830 zone is particularly important as it aligns with the confluence of the 20-day Exponential Moving Average (EMA) and the upper boundary of the current trading channel.
However, Bajaj Broking cautioned that failure to breach the resistance zone could keep Nifty confined within a broad range of 23,100–23,400 in the coming sessions.
RSI Signals Weak Momentum, But Recovery Can’t Be Ruled Out
Hariprasad K, Research Analyst and Founder of Livelong Wealth, pointed to weakening momentum indicators as a sign of caution.
The daily Relative Strength Index (RSI) is currently hovering around 38, indicating a bearish undertone in the market. However, with the RSI approaching oversold territory, analysts believe short-covering rallies and temporary rebounds remain possible.
This suggests that while sentiment remains fragile, traders should remain alert for sharp recovery moves if market conditions improve.
Bank Nifty Witnesses Profit Booking After Recent Rally
Bank Nifty also experienced selling pressure after a strong run-up in recent sessions. The index formed a negative candle on the daily chart after encountering resistance around the 55,500–55,600 zone.
Despite the decline, analysts remain optimistic about the broader trend.
Bajaj Broking noted that Bank Nifty continues to trade above its 20-day EMA, indicating that the underlying structure remains positive. The formation of a long upper-shadow Doji candle reflects exhaustion in bullish momentum, but the recent correction appears to be more of a profit-booking phase rather than a reversal of trend.
Key Levels To Watch For Bank Nifty
The brokerage highlighted that a decisive breakout above the 55,500–55,600 resistance zone could revive bullish momentum and push Bank Nifty towards 56,000 and subsequently 56,500.
On the downside, immediate support is placed in the 54,000–53,800 region. Holding above this zone could help maintain the positive medium-term outlook.
Market Recap: Nifty Loses Momentum After Strong Start
Indian equities surrendered most of their intraday gains during the previous trading session after initially witnessing strong buying interest.
The Nifty 50 ended 0.12% lower at 23,214.95 after touching an intraday high of 23,425.35.
The Sensex managed to close marginally higher, gaining 0.09% to settle at 73,983.18. However, the index gave up more than 600 points from its intraday peak of 74,613.01, reflecting cautious investor sentiment.
Banking Stocks Provide Support While IT Weighs On Markets
Sector-wise, banking stocks provided the biggest support to the benchmark indices.
Among major contributors to Nifty’s gains:
- HDFC Bank contributed 35.32 points
- ICICI Bank added 31.22 points
- Axis Bank contributed 14.89 points
- Larsen & Toubro added 9.13 points
- Hindustan Unilever contributed 7.83 points
On the downside, IT and select heavyweight stocks dragged the index lower.
- Infosys emerged as the biggest negative contributor with a 28.02-point drag
- Reliance Industries weighed on sentiment
- Bharti Airtel also contributed to the decline
- Hindalco was among the major laggards
Outlook: Consolidation Likely Until Key Breakout Levels Are Crossed
Analysts broadly agree that Nifty remains trapped within a consolidation range, with geopolitical uncertainties and weakening momentum indicators preventing a strong directional move.
A decisive breakout above 23,425 could trigger fresh buying and open the path towards higher targets, while failure to reclaim resistance levels may keep the benchmark under pressure and expose it to a retest of the 23,100–23,050 support zone.
For Bank Nifty, the focus remains on the 55,500–55,600 resistance area, with traders watching for signs of renewed strength after the recent bout of profit booking.