D-Street Ahead: How will Indian stock market move next week? Your trading strategy—key technical calls for Nifty, Sensex

D-Street Ahead: The Indian stock market logged a sharp downturn after a week-long consolidation phase, dragged primarily by weak global cues and renewed concerns over a trade war. Domestic equity benchmarks Sensex and Nifty 50 snapped a two-week winning streak slipping over 2.5 per cent each.

The Nifty 50 declined by 2.61 per cent to close at 22,904.45, while the Sensex fell 2.65 per cent, settling below the 76,000-mark to 75,364.69. The indexes declined 1.5 per cent and 1.2 per cent, respectively, on Friday. Investor sentiment was rattled by the imposition of reciprocal tariffs by the US and retaliatory measures by other nations, raising fears of a global trade war.

A steep decline in the US stock markets further dampened hopes of a recovery. Adding to the woes, foreign institutional investors (FIIs), who had turned net buyers briefly, resumed selling Indian stocks, deepening the bearish mood.

Also Read: TCS Q4 Update: India’s largest IT major to declare March quarter results on THIS date, consider final dividend for FY25

Indian stock market's performance last week

During the week, the 30-share BSE Sensex tanked 2,050.23 points or 2.64 per cent, while the NSE Nifty 50 index declined 614.8 points or 2.61 per cent. Broader markets mirrored the trend, with mid and small-cap indices shedding between two per cent and 2.6 per cent. IT and commodity stocks led declines due to their high exposure to the US economy and global growth.

On the sectoral front, most bore the brunt of the fall. Heavy selling was seen in IT and metal stocks, which emerged as the worst performers. The IT index slid 9.2 per cent, posting its biggest weekly drop in five years, on worries that a potential recession in the US economy could derail the recovery in technology spending.

Metals and energy stocks plunged 7.5 per cent and 3.8 per cent, respectively, as concerns over global growth hit base metals and crude oil prices. FMCG was the only sector to post gains, rising a modest 0.45 per cent, indicating defensive buying amid market volatility. However, select pockets like banking, and financial services showed relative resilience, which helped limit the downside to an extent.

Also Read: Goldman Sachs slashes crude oil price target by 5.5% amid tariff woes after Brent, WTI hit four-year low on OPEC+ supply

Drugmakers had a tumultuous week. The stocks jumped on Thursday as the sector was exempted from tariffs, but the optimism was short-lived with Trump threatening to levy tariffs at “levels never seen before.” The pharma index dropped four per cent on Friday, losing 2.7 per cent during the week.

Sensex, Nifty, and Bank Nifty technical levels to watch

Technically, the Nifty has broken below all major price and moving average supports, indicating potential for further downside. The immediate support lies at 22,600, while a decisive breach could open the door towards 22,100. On the upside, any recovery is likely to face stiff resistance in the 23,100–23,400 zone.

“Interestingly, the banking index is displaying strength and could continue to outperform. It has immediate support at 50,700, with stronger support around 50,000. If the index breaches 52,800, it may pave the way for fresh highs. The divergence between Nifty and banking index could provide some cushion against an aggressive decline,” said Ajit Mishra – SVP, Research, Religare Broking.

Also Read: Trump tariffs: Why is the US President confident of Fed rate cuts despite Jerome Powell’s inflation warning?

According to market experts, the Nifty 50 has slipped to a two-week low, weighed down by rising fears of a global trade war and recession, which have created a wave of negative sentiment. The index has broken below its crucial 21-day and 55-day EMAs, signaling a shift back into a negative trend.

"The RSI has dropped below its 14-day SMA, further confirming weakening momentum. With the market likely to open gap-down on Monday, the near-term outlook remains bearish. Key support levels to watch are 22,300 and 22,000. On the upside, 22,800 now acts as a strong resistance. In this environment," said Puneet Singhania, Director at Master Trust Group.

Bank Nifty has shown relative strength, closing flat this week, despite broader market weakness. The index continues to trade above its double bottom pattern and remains in a tight range over the past 10 sessions. It is holding above the crucial 21-day and 55-day EMAs, indicating short-term support.

Also Read: Wipro Q4 Update: India’s fourth-largest IT major to declare March quarter results on THIS date; stock sheds 18% YTD

"The breakout level of 50,600 acts as a key support; a breach below this could lead to a decline toward 49,600, which aligns with the 55-week EMA. On the upside, the psychological resistance of 52,000 remains a major hurdle. Until this level is crossed decisively, further upside momentum is unlikely. The overall view remains cautious, and traders are advised to stay alert," said Singhania.

D-Street trading strategy for next week

Strategy: Stay Nimble, Trade Selectively

"In the current setup, traders are advised to maintain a “sell on rise” strategy for the index until a clear reversal or a retest of the 22,100 support level occurs. As earnings season begins, stock- specific action is likely to dominate, presenting opportunities on both the long and short sides," said Ajit Mishra

Banking and financial stocks continue to display consistent strength and could remain in favor. Meanwhile, traders should navigate the broader market volatility with caution, and consider hedging long positions using index puts.

"With uncertainty prevailing, agility and sectoral preference will be key to navigating the choppy waters in the days ahead," added Mishra. According to Puneet Singhania, Nifty becomes a sell-on-rise market, and traders are advised to remain cautious and avoid aggressive long positions until stability returns.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.