Equity benchmarks closed the week on a subdued note, ending with modest losses amid heightened volatility. The holiday-shortened week began on a weak footing, with a sharp gap- down triggered by global concerns. However, sentiment improved significantly in the subsequent sessions, helping the Nifty and Sensex trim losses and settle at 22,828.50 and 75,157.26 respectively, down nearly 0.5%.
Technically, the Nifty witnessed a smart rebound after breaching its March lows and is now testing its 20-day exponential moving average (DEMA) around the 22,900 mark. A sustained close above this level could open the door for a further rally towards 23,400, where the 100 and 200 DEMA converge. A major hurdle remains at 23,800. On the downside, immediate support lies at 22,300; a break below this could lead to a retest of the recent swing low near 21,700.
Bank Nifty continues to show relative strength, reclaiming key moving averages after a brief dip. Sustaining above the 50,000 level would keep the bullish momentum intact, with potential upside targets at 52,000 and eventually 53,500.
Given the prevailing uncertainty and sharp swings, traders and investors are advised to adopt a hedged approach until we see further cool-off in the volatility index, India VIX. Meanwhile, selective stock-picking opportunities continue to emerge, particularly in the banking and financial space. Investors may also consider quality names from other sectors on dips.
