Despite rising geopolitical tensions and lingering uncertainty around global tariffs, the underlying structure of Indian equity markets may be stronger than headline weakness suggests, according to technical analyst Rohit Srivastava, Founder of Strike Money Analytics & Indiacharts. While Nifty has slipped below recent record highs and Bank Nifty has retreated from the 60,000 mark, Srivastava believes market participants may be reading too much into the apparent fragility.

Technical Structure Shows Improvement

Speaking to ET Now, Srivastava acknowledged the challenging pattern where two-to-three-day rallies are consistently given back over the following four to five days since early December. However, he emphasized a crucial positive development: the formation of successive higher bottoms throughout December.

"The good news is that we have made a higher bottom each time," Srivastava noted, explaining that from early December through mid and end-December, the index has consistently held above previous lows. This pattern suggests downside pressure is gradually weakening, with the analyst expecting similar behavior to continue.

Key Support and Resistance Levels

Srivastava's technical analysis identifies critical levels for Nifty's near-term trajectory:

"That will be the big breakout point where the up move probably accelerates," Srivastava said regarding the 26,540 level, though he cautioned that reaching this threshold may not be easy in the immediate term.

Sectoral Rotation Caps Index Momentum

The analyst attributes the capped index-level momentum to heavy sectoral rotation, which prevents sharp runaway moves but indicates healthier market breadth. Leadership within the market has been constantly shifting, with Reliance Industries cooling off after appearing as a standout performer a month ago, while strength has rotated into metals and banking sectors.

"This is a slowly upward-building market and we are seeing that trend develop across the board, one sector at a time," Srivastava explained, viewing this rotation as a sign of more sustainable market development.

Banking Sector Shows Relative Strength

Srivastava highlighted banking as a clear standout sector, noting that Bank Nifty has been consolidating and declined much less than the broader market. The index is "building a base close to 59,800," with interest rate-sensitive sectors potentially continuing to outperform.

Within banking, his preference is selective, favoring second-line private lenders over heavyweight names:

Preferred Banking Stocks:

• RBL Bank
• IDFC First Bank
• IndusInd Bank

These stocks are showing better relative strength compared to larger, more widely owned names like HDFC Bank and Kotak Mahindra Bank.

Broader Sectoral Outlook

Beyond banking, Srivastava remains constructive on several sectors showing momentum:

• Metals: Continuing to show strength as part of the rotation
• Autos: Maintaining positive outlook
• Real Estate: Early signs of momentum returning, with DLF cited as a recent recommendation

Srivastava's overall assessment suggests that while headline indices may remain range-bound in the near term, the market is quietly laying groundwork for a more sustainable uptrend, driven by rotation and selective sectoral strength rather than broad-based exuberance.

Indian equity benchmarks witnessed mild selling pressure after hitting record highs earlier this week, but the broader trend remains constructive, according to Vinay Rajani, AVP and Senior Technical & Derivative Analyst at HDFC Securities. Speaking to ET Now, Rajani characterized the recent decline in the Nifty as a "running correction" rather than a trend reversal, maintaining an optimistic outlook despite the index slipping over 200 points from its lifetime high.

Key Technical Levels and Market Structure

The Nifty continues to trade above its 20-day, 50-day and 100-day moving averages, indicating that the positional uptrend remains intact. Rajani emphasized the importance of specific technical levels for traders and investors to monitor.

"As long as the index holds above 26,100 on a closing basis, the bullish structure remains valid," Rajani stated, adding that this level should act as a stop-loss for traders holding long positions. On the upside, the recent peak of 26,373 remains an immediate resistance, with a sustained move above this level potentially opening the door for a fresh all-time high at 26,700.

Bank Nifty Demonstrates Relative Strength

In contrast to the broader market consolidation, Bank Nifty has been outperforming and remains technically strong. Banking stocks including ICICI Bank, Axis Bank, and Kotak Mahindra Bank are in clear uptrends, supporting the index's relative strength.

"Bank Nifty is likely to continue outperforming. Traders should hold long positions with a trailing stop-loss of 59,600," Rajani recommended. The analyst identified 60,450 as a key resistance level, representing the previous session's high, with a breakout above this level potentially signaling further upside momentum.

Individual Stock Analysis

Rajani provided specific commentary on notable stock movements, highlighting contrasting technical pictures for major names. Trent faced significant weakness following its Q3 updates, with the stock declining nearly 8.00% on heavy volumes and forming lower tops and lower bottoms on weekly charts.

"Technically, Trent looks weak in the short term. Traders should avoid catching a falling knife," he cautioned, noting that while the stock may present long-term investment opportunities, near-term momentum remains negative.

In comparison, Reliance Industries appears better positioned technically despite recent declines. The stock continues to trade above its 100-day and 200-day moving averages, maintaining its primary positive trend. "Reliance is likely to find support at lower levels and attempt a bounce, making it relatively stronger than Trent on positional charts," Rajani observed.

Market Outlook and Strategy

Despite the headline index consolidation, Rajani noted that several large-cap stocks continue to make fresh 52-week and all-time highs, suggesting selective strength within the market. This divergence indicates underlying resilience in specific sectors and individual names.

Rajani maintains a positive stance on Indian equities, advising market participants to stay aligned with the prevailing trend. "Momentum is missing at the index level, but sectoral and stock-specific opportunities remain. A catch-up rally in the Nifty cannot be ruled out if global cues remain supportive," he concluded, emphasizing the importance of selective stock picking in the current environment.