The NSE Nifty 50 index commenced the pre-open trading session with a decline of 0.14%, setting a cautious tone for the market opening. This early movement provides an indication of investor sentiment before the commencement of regular trading hours.

Pre-Market Performance

The benchmark index's performance in the pre-open session reflects the initial assessment by market participants of various factors that could influence trading during the day.

The pre-open session serves as an important indicator for traders and investors to gauge market sentiment before the regular trading session begins. The 0.14% decline suggests a measured approach by market participants in the early hours.

Indian equity markets witnessed significant corrective pressure during a volatile trading week, with benchmark indices ending substantially lower. The Nifty experienced persistent selling pressure throughout the week, reflecting broader market uncertainty and risk-off sentiment among investors.

Market Performance Overview

The benchmark Nifty index demonstrated extreme volatility, oscillating within a wide intra-week range of 733 points as it moved between the high of 25,653 and low of 24,919. This substantial range highlights the intense battle between bulls and bears during the trading sessions.

The India VIX surged sharply by 24.80% to reach 14.19, indicating a sudden spike in risk perception and market uncertainty. This volatility spike suggests investors are pricing in higher uncertainty for near-term market movements.

Technical Analysis and Key Levels

The current technical structure of Nifty reflects a significant breakdown from previous consolidation patterns. After failing to confirm a breakout, the index has slipped below the trendline drawn from the high formed in September 2024. The index has also breached the short-term 20-week moving average and now hovers near the lower Bollinger Band.

The region of 25,000–25,150, which includes the 200-DMA on the daily chart, represents a key support zone currently being tested. If this zone is violated convincingly, it may trigger a deeper corrective move. Conversely, any bounce would remain vulnerable unless the index reclaims the 25,650 levels.

Sector Rotation Analysis

Relative Rotation Graphs comparing various sectors against the CNX500 Index reveal distinct sectoral trends. The analysis shows sectors positioned across different quadrants based on their relative performance and momentum.

Leading Quadrant (Outperformers):

• Nifty IT Index (strong rotation)
• Financial Services Index
• Midcap 100
• PSU Bank Index
• Banknifty
• Metal Index
• Services Sector Index

Weakening Quadrant:

• Infrastructure Index
• Nifty Auto Index

Lagging Quadrant (Underperformers):

• Nifty Energy Index
• Realty Index
• FMCG Index

Improving Quadrant:

• Pharma Index (rolled back from leading quadrant)

Week Ahead Outlook

Given the steep correction and mildly oversold setup on the daily chart, the coming week may see a tentative start with possible technical rebound. However, the week will be shortened by the Republic Day holiday on Monday, and Tuesday marks the monthly F&O expiry, which typically brings additional volatility.

The weekly chart shows a long black candle, signifying strong selling pressure and breakdown from prior consolidation. Pattern-wise, Nifty has broken below the falling trendline with bearish implications, confirmed by a wide-range candle and close below the 20-week moving average.

Trading Strategy

For the week ahead, a cautious and stock-specific approach is recommended. While short-term oversold conditions may fuel a bounce, the broader technical structure has weakened considerably. Traders should avoid aggressive long positions and focus on protecting existing profits. Any upside movement should be utilized to lighten positions or initiate low-risk short opportunities if resistance levels hold. The approach should emphasize high selectivity, tight risk management, and light exposure ahead of expiry volatility.