Indian equities consolidate near key technical resistance
India's benchmark indices ended the week marginally lower, but a resilient rupee and constructive banking sector charts suggest the market is poised for a breakout.
Indian equities rallied more than 1% on Friday, recovering a significant portion of the week's losses as financial stocks and IT heavyweight TCS led a broad-based rebound. The session's strength came amid easing crude oil prices and a strengthening Indian rupee, which helped offset early weakness. Despite the late surge, the Nifty 50 closed the week at 24,206, registering a marginal decline of 0.25%, while the Bank Nifty ended essentially flat at 57,938.
While the headline indices traded in a range-bound manner, underlying market participation remained robust. Sectors including real estate, information technology and new-age businesses outperformed the broader market, delivering gains of roughly 3% to 5% on the week. “Despite the subdued movement in the benchmark indices, broader market participation remained healthy,” said Ganesh Dongre, Senior Manager of Technical Research at Anand Rathi.
From a technical standpoint, the Nifty 50 has consolidated within a tight 23,800 to 24,500 corridor. The index's repeated ability to hold above the 23,800 support level, combined with a series of higher lows on the weekly chart, points to sustained buying interest. However, a decisive close above 24,600—a level coinciding with the 200-day Exponential Moving Average—is required to accelerate the next leg of the rally.
On the downside, a strong demand area exists between 23,500 and 23,600 to cushion any near-term corrective decline. The banking sector displays a similarly constructive setup, with the Bank Nifty maintaining its position above its 200-day EMA. Immediate support sits near 56,000, but the index requires a sustained breakout above the 58,000 to 58,500 resistance zone to target the 60,000 level.
Capitalizing on this technical backdrop, Anand Rathi flagged specific opportunities in the domestic banking space. The firm recommended buying Bank of Baroda in the ₹250-252 range for a target of ₹265, and Union Bank of India between ₹162-165 for a target of ₹175. Varun Beverages was also highlighted as a buy in the ₹475-478 band, carrying a target price of ₹510.
