Nifty weekly prediction (Jan 27-30): Candlestick patterns point to continued pressure

Nifty ended the week sharply lower, slipping below crucial moving averages and confirming bearish momentum. Experts warn of further downside unless key supports hold, even as oversold indicators hint at possible short-term consolidation.

Indian equity benchmarks ended the week on a weak note, with the Nifty 50 declining 2.51% amid broad-based selling pressure across sectors. The index decisively slipped below its crucial 200-day Exponential Moving Average (EMA) and closed beneath it, a development that signals a shift toward a negative medium-term trend.

Adding to the bearish setup, the 21-day EMA has crossed below the 55-day EMA, confirming strengthening downside momentum. Market experts believe this technical breakdown increases the risk of further correction in the near term.

According to Dr. Ravi Singh, Chief Research Officer at Master Capital Services Ltd., the Nifty has weakened considerably from a technical perspective. He noted that both the weekly chart structure and candlestick patterns point to continued pressure in the coming sessions.

“Immediate support for the Nifty is placed near 24,850. A decisive break below this level could drag the index toward 24,600,” Dr. Singh said. On the upside, he sees resistance at 25,250, and only a sustained move above this level could trigger a recovery toward 25,500. “Until then, a sell-on-rise strategy remains preferable,” he added.

Echoing similar concerns, Bajaj Broking Research observed that the Nifty has formed a large bearish candle, marking lower highs and lower lows for the third consecutive week. The brokerage highlighted that the index is currently hovering near the lower band of its rising channel formed over the last seven months.

This zone coincides with the 52-week EMA, placed in the 25,000–24,800 range. “A breach below this support band would signal an extension of the decline toward the 24,600 zone,” the brokerage said. However, it also cautioned that several technical indicators are nearing oversold territory, raising the possibility of near-term consolidation if supports hold.

Bank Nifty Outlook: Corrective Bias Remains

The Bank Nifty also witnessed sharp selling pressure, declining 2.7% over the week. Dr. Ravi Singh pointed out that the index slipped below the crucial 59,000 support level and fell under its 55-day EMA, forming a bearish Marubozu candle on the weekly chart.

“This indicates strong selling at higher levels and suggests that the overall structure of Bank Nifty has weakened,” he said.

Bajaj Broking Research further noted that Bank Nifty has broken below its seven-week consolidation range of 58,800–60,400. “Follow-through selling could open further downside toward 57,600 and 57,000 levels in the coming weeks,” the brokerage said, adding that 59,000 will now act as immediate resistance.

Global and Domestic Factors to Watch

Market sentiment in the coming week is expected to remain cautious due to a mix of global and domestic headwinds. Subdued and cautious commentary from several corporates during the Q3 earnings season has dampened investor confidence. Additionally, renewed trade tensions between the U.S. and major economies, particularly Europe, are adding to uncertainty.

Escalating geopolitical tensions involving the U.S. and Iran, along with broader Middle East developments, have also raised concerns about potential disruptions in crude oil supply routes. This, combined with heightened volatility across global asset classes, is likely to keep equity markets on edge.

With technical indicators flashing warning signs and macro risks elevated, experts advise traders and investors to remain cautious, closely track key support levels, and avoid aggressive long positions until clearer signs of stability emerge.