Stock market: How is Nifty likely to perform in short-term? Key levels to watch this week

Indian stock market: Domestic equity benchmarks, Sensex and Nifty 50, recorded their sharpest intraday decline of 2025, marking their eighth consecutive day of losses on Friday due to sustained foreign capital outflows and weak global signals.

The indices ended lower for the fifth straight month, reaching their lowest levels since June 2024, largely influenced by the impact of US tariffs on global trade.

Over the week, the Nifty 50 index fell nearly 3%, closing at 22,124.70, while the BSE Sensex declined by 2.81% to end at 73,198.

“Nifty 50 has corrected 15.87% from its all-time high, marking a five-month losing streak, the longest since 2000. Weak sentiment persists due to slowing growth, declining earnings, and foreign outflows. Global uncertainties, including Trump's tariff announcements, have further dampened risk appetite. Investors await the December quarter GDP data on Friday for further direction,” brokerage firm Choice Broking said in a note.

Nifty key levels to watch out

The brokerage firm further said that the Nifty has formed a strong bearish candle on the daily chart, signaling indecision and volatility.

On the technical front, it said, “The short-term trend remains weak, with resistance seen near 22,600 and a critical hurdle at 22,800. As long as the index trades below 22,200, a sell-on-rise strategy is preferred, keeping upside moves limited. A decisive breakout above 22,800 would be necessary for a trend reversal, potentially shifting momentum in favor of buyers.”

On the downside, 22,000 is a key support level, and a breakdown below this could accelerate selling pressure towards 21,800–21,600.

“If Nifty fails to hold these levels, further declines cannot be ruled out. However, strong support is visible at 21,800 and 21,500, as indicated by Open Interest (OI) data, which suggests traders are positioning for stability around these levels. A sustained hold above 22,000 could provide temporary relief, but the broader sentiment remains cautious,” it added.

For the coming week, Nifty’s movement will largely depend on global cues, trade developments, and the GDP data outcome. The brokerage firm explained that until a decisive breakout occurs, traders are likely to maintain a cautious approach, favoring a sell- on-rise strategy while closely watching key support levels.

Options data further highlights significant resistance at 22,500 and 22,800, with the highest Call Open Interest concentration. A breakout above 23,000 could trigger short covering and fresh buying, leading to a potential recovery.

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