The last two trading days of this week reminded participants how quickly sentiment can shift.
The last two trading days of this week reminded participants how quickly sentiment can shift.
After a smooth ride for the bulls early this week, the markets retraced sharply on Thursday with a 400-point single-day fall and a 117-point recovery today to end the week at 25571, continuing a lower-high and lower-low pattern from budget day.
The uncertainty increased later in the week as global headlines popped up, particularly geopolitical tensions between the US and Iran.
With a weekend in between, uncertainty tends to feel amplified. And that naturally raises the question:
How should one approach the coming week, and what is the Market Signalling?
The market signals a volatile, yet the range bound movement from 25050 to 26100 since October 2025.
At this stage, Nifty (25571) is giving support signals as long as Nifty can hold 25475 on a closing basis. On the upside, I shall be keen to see how quickly the market crosses 25888. Any fresh rally can then be confirmed if it sustains above the said levels. On the contrary, we may witness profit taking move as Nifty closes below 24475.
The market clearly signals volatility to remain, and since all major events, such as earnings season and the India-US trade deal, are over, smart money will gear up to make a decisive move.
Looking at the Advance/Decline scenario for the entire week, only Banking, FMCG, and Pharma sectors had higher advances than declines. The midcap and smallcap indices, interestingly, had the same advance /decline scenario as they did in the previous week.
Banknifty (61172) has emerged as a leader for a while now (compared to Nifty) and has outperformed other indices. The Banknifty has interestingly formed a bullish engulfing pattern this week, which confirms the uptrend is strong and sustainable next week.
How should you approach the market?
Traders should track Banknifty, which looks stronger for the coming days. However, volatility shall remain with a positive bias.
The midcap index looks stronger than the smallcap and microcap indices for the coming days. Broader market shall show strength, very selectively.
Swing traders should focus on the strong technical setup of Banknifty and Midcap stocks. The chart structure of Banknifty is significantly strong, and PSU Banking stocks can be looked upon for decent gains.
Investors should have a busy weekend as the earnings season is just over, and it is the right time to navigate through the companies that posted strong growth and profitability. Management commentary and guidance play a vital part here.
The Weekend Factor
Geopolitical tensions create uncertainty because outcomes are binary and unpredictable.
For the next week, Markets may gap up. Markets may gap down. Or markets may open flat and stabilise.
The truth is that no one knows with certainty.
What usually hurts traders and investors is not the gap itself, but the emotional reaction to it. When we mentally commit to one expected outcome over the weekend, we subconsciously prepare for only that scenario. If the market does something else, panic takes over.
It is far wiser to enter Monday with flexibility rather than prediction. Taking decisions based on the market momentum and chart structure. Some important levels have already been discussed above in this blog.
In volatile environments, disciplined investors rely on data and predefined frameworks rather than reacting to headlines or emotionally charged narratives.
"Without data, you're just another person with an opinion."
— W. Edwards Deming
I hope the analysis and market view will be informative and conclusive to you. If you liked it, spread the good work to your fellow traders/investors, friends, and colleagues.
Happy Investing!
Kushal Lakhani
VK Advisors