Nifty ended last week below 25,000, signaling a shift in sentiment from bullish to cautious. An analyst picks ‘defense’ as the sector to watch in the week ahead.

The Nifty saw a notable decline over the past week, closing significantly below the psychological 25,000 mark and slipping further beneath key moving averages of the 20-day moving average (DMA) and 20-day Exponential Moving Average (EMA) on both the daily and weekly charts. 

SEBI-registered analyst Mayank Singh Chandel noted that the week’s candle on both the daily and weekly frames showed strong supply, with upper wicks and clear rejection in the 25,100–25,250 zone. The index is consolidating just above the critical weekly support of 24,800, he added. 

The 24,800–25,000 band is now functioning as a decisive support-turned-battleground for market participants. The short-term sentiment has shifted from a "buy-on-dips" to a "wait-and-watch" stance, with a risk of further downside on a break below 24,800. 

Chandel identified immediate resistance at 25,000, followed by 25,100, and 25,250 with upside targets at 25,350 and 25,500 (gap-fill). On the downside, he sees immediate support at 24,800, with major support zone between 24,614 and 24,500. Deeper support is seen at 24,400, followed by  23,800. He believes that a fresh upside is unlikely unless Nifty reclaims and closes firmly above 25,100–25,250. 

On the other hand, sustained trade below 24,800 can trigger a deeper correction toward the 24,500–24,400 zone, with 24,614 and 24,500 as the next key markers. 

Derivatives data indicate that the 25,000 zone remains in a tug-of-war, with sizable call and put Open Interest (OI), but persistent call writing above 25,000 suggests overhead supply. A decisive break below 24,800 could unleash fresh long unwinding and put pressure for sharp moves toward 24,500 and lower. 

In other momentum indicators, the daily Relative Strength Index (RSI) is slipping toward the 40–42 region and below the neutral 50, indicating weak momentum. Weekly RSI stands at 55, with no clear bullish reversal signal. The volatility indicator, India VIX remains muted (11.30), indicating traders are not anticipating major volatility shocks, but Chandel warns traders to be aware of complacency during expiry week. 

He concluded that the earlier bullish structure is under threat as Nifty failed to hold the crucial 25,000–25,100 support region. Downside risks have increased: a break and close below 24,800 may trigger a rapid move toward 24,614, then 24,500, and possibly 24,400/23,800 if selling pressure persists. On the upside, only a strong, high-volume move above 25,100–25,250 will restore bullish confidence, paving the way for a move back to 25,350–25,500. 

With expiry ahead and OI crowding at pivots, Chandel expects increased volatility and wild swings if levels break decisively.

Sudhansu Sekar Panda of Bluemoon Research expects it to be a volatile week of trade. On a daily chart, he noted that Nifty is already in a decline and has fallen from 25,250 to 24,800. On the weekly chart, the index has found significant support around 24,500. Panda said that Nifty is likely to stay weak below 25,000 until it rises above it.

For the Nifty Bank, it was trading in a box pattern, ranging between 56,200 and 57,400 on the daily chart. If it breaks the 56,200 (support) on a daily chart, then more decline may be possible. He identified two major technical levels, such as the 50 EMA at 56,111 and the 20 EMA at 56,800. A close below 56,800 or the 20 EMA is a further signal of weakness.  

According to Panda, the defense sector will be in the spotlight in the week ahead, as most defense stocks are in a decline phase, but some have a 'buy on dip' criteria for a swing basis.  He added that GRSE appears to be a strong candidate if it falls to the ₹2,475 area, as per the buy-on-dip setup for the next 15 to 25 days. And BDL looks like a strong candidate if it falls to ₹1,550 to ₹1,575 for swing purposes.

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