Dalal Street Week Ahead: Nifty enters consolidation phase; breakout above 26,100 key for next market move

The Nifty ended the week mildly lower, extending its sideways consolidation within the 25,700-26,100 band amid falling volatility. With no clear breakout and the India VIX near multi-year lows, markets may remain range-bound, making stock-specific and sectoral positioning crucial in the near term. Given the current context, participants are advised to adopt a stock-specific approach while keeping a cautious stance on aggressive index bets. ETMarkets.comGiven the current context, participants are advised to adopt a stock-specific approach while keeping a cautious stance on aggressive index bets. The markets consolidated through the previous week and ended on a mildly negative note. Nifty remained within a defined trading range of 25,700 to 26,100, lacking any directional breakout. The week was marked by low volatility, with the India VIX declining 5.70% to 9.52, near its multi-year lows, highlighting continued complacency in the system. On a weekly basis, the Nifty declined by 80.55 points or 0.31%, signalling a pause after a strong preceding uptrend. The Nifty currently finds itself in a sideways consolidation, navigating within a narrow 400-point band. It continues to trade above key moving averages, but the absence of follow-through buying near the upper edge of the range suggests temporary fatigue. Importantly, the 25,700-25,850 zone has emerged as a critical near-term support, not only because it marks the lower end of the current consolidation but also because it aligns with the 50-DMA. The trend still remains broadly positive, but a sustained move above 26,100 is now essential to reignite upward momentum. A breakdown below 25,700 may trigger mild profit-taking and broaden the range lower. ETMarkets.com Given the lack of a decisive move in either direction, markets may see a muted start to the truncated week ahead, particularly with the Christmas holiday on Thursday, which will lead to lower participation. On the upside, resistance is expected at 26,100 and then at 26,250. Supports come in at 25,850 and 25,700, both structurally important in the current context. The weekly RSI stands at 59.92 and remains neutral without showing any divergence against price, suggesting ongoing range-bound behaviour. The MACD remains above the signal line on the weekly chart, though the histogram is flattening, indicating a loss of momentum. No significant candlestick formation was observed during the week, highlighting indecision. Live Events From a pattern analysis perspective, Nifty is seen consolidating just above the upper trendline of a broad symmetrical triangle it broke out from earlier. While the breakout still holds, the index is testing its breakout zone. Price action continues to respect the rising short- and medium-term moving averages, with the 50-week MA at 24,518 and the 100-week MA at 24,067 offering deeper structural support. The Bollinger Bands are beginning to narrow, often a precursor to a range expansion move in the coming weeks. Given the current context, participants are advised to adopt a stock-specific approach while keeping a cautious stance on aggressive index bets until the range of 25,700- 26,100 is resolved. Protection of profits should take precedence, especially in the absence of any major...

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