Sensex, Nifty fell 2.5% this week: Where can one go long in this choppy market? Check what experts say

Sensex, Nifty fell 2.5% this week: Where can one go long in this choppy market? Check what experts say

• Sensex and Nifty fell around 2.5 percent this week amid bearish market sentiment
• Nifty slipped below key moving averages; support seen at 24,750–24,900 levels
• Market outlook cautious due to global signals and domestic fiscal cues.

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Indian benchmark indices Sensex and Nifty declined around 2.5 percent each this week, as bears took control over Dalal Street. Analysts have weighed on the all-important key levels to watch out for, especially on the long side.

Nifty 50 declined around 645 points during the week to close at 25,048.65 on January 23. Sensex, meanwhile, fell nearly 2,033 points during the same period to end the week at 81,537.7. The benchmark indices recorded the steepest steepest weekly drop in four months.

Nifty has finally slipped below the 200 DMA on a closing basis, suggesting capitulation by the bulls after a futile attempt to defend the crucial long-term moving average, said Rupak De, Senior Technical Analyst at LKP Securities.

As a result, short- to medium-term sentiment is likely to remain weak as long as the index trades below 25,500, according to the analyst. However, on the downside, the decline could extend toward 24,700 in the short term.

Nifty on the weekly chart has formed a sizable bearish candle with a lower high and lower low, which highlights the continuation of downward bias for the third week in a row, said Bajaj Broking. The domestic brokerage added that a pullback attempt during the week meet with strong selling pressure as the index closed around the 52 weeks EMA.

"Nifty is currently placed around the lower band of the rising channel of the last seven months which also coincides with the 52 weeks EMA placed around 25,000-24,800 levels. A breach below the same will signal extension of the decline towards 24600-24,500 levels," Bajaj Broking said.

Weekly stochastic is approaching oversold territory after 1400 points decline in just 14 sessions, it added. The brokerage sees Nifty seeing some consolidation in the range of 24,800-25,500 in the coming weeks, if it holds above the support area of 25,000-24,800.

On the higher side, it sees 25,400-25,500 as the immediate resistance for the coming weeks.

Technically, the Nifty has slipped below its long-term moving average, the 200 DEMA, which signals the possibility of further downside, said Ajit Mishra – SVP, Research, Religare Broking. The 24,750–24,900 zone now emerges as the next key support area, while the 25,300–25,400 zone is likely to act as an immediate hurdle in case of any rebound, the analyst said.

Mishra however noted that select pockets continue to show resilience and are offering buying opportunities. “In this environment, participants are advised to maintain a selective and balanced approach, take positions on both sides based on sectoral strength and weakness, and keep a strict check on position sizing,” he said.

“In the Nifty options space, the highest call open interest was seen at the 25,300 and 25,500 strike prices, suggesting strong resistance levels, while the 25,000 strike held the maximum put open interest, acting as a key support. The Put-Call Ratio (PCR) stood at 0.58. Overall, the market closed on a weak note, with sentiment remaining fragile amid currency pressure and cautious positioning in the derivatives market,” said Ashika Institutional Equities.

What lies ahead?

Indian equity markets remained cautious and volatile through the week, pressured by renewed global trade tensions and continued foreign investor outflows, said Vinod Nair, Head of Research, Geojit Investments. He added that fresh US tariff threats during the week against European nations linked to the Greenland issue dampened global risk appetite, prompting a shift toward safe-haven assets. “Moreover, rising global bond yields and uncertainty surrounding the U.S. Supreme Court’s review of Trump-era tariffs further restrained risk-taking,” he said.

Speaking about what lies ahead, Nair said that market direction in the coming week will likely be driven by global macroeconomic signals and domestic fiscal expectations. He said that investors will closely track guidance from the US Federal Reserve on the trajectory of interest rate cuts, while positioning may be influenced by anticipation surrounding the Union Budget, particularly any measures aimed at easing external trade pressures and supporting capital flows.

“With the Q3 earnings season still underway, stock-specific movements are expected to remain prominent. Overall sentiment is likely to stay cautious, shaped by global developments, currency trends, and earnings outcomes, with selective opportunities emerging in segments supported by resilient domestic demand,” he added.