D-Street Ahead: How will Indian stock market move next week? Your trading strategy—key technical calls for Nifty, Sensex

D-Street Ahead: The Indian stock market snapped its longest weekly winning streak of 2025 amid heightened geopolitical tensions between India and Pakistan, which dampened investor sentiment and dragged the indices lower.

Domestic equity benchmarks Sensex and Nifty 50, experienced a sharp volatility on border conflict. The nuclear-armed neighbours have been locked in a conflict since Wednesday, when India targeted terrorist base camps locations in Pakistan in response to a deadly attack in Kashmir last month. Pakistan retaliated, and the countries have exchanged cross-border attacks since.

Indian stock market's performance last week

The key equity indices registered notable losses this week, primarily driven by escalating geopolitical tensions between India and Pakistan following reports of drone and missile attacks. The sell-off intensified on the final trading day of the week, after the Indian Army reported multiple overnight drone and missile attacks by Pakistani forces, heightening fears of escalation.

Notably, despite the pullback, the broader market remained comfortably above key moving averages, including the 21, 55, 100, and 200-day EMAs, underscoring that medium-term sentiment remains constructive. 12 of the 13 major sectors declined last week, while the small-caps and mid-caps lost 1.9 per cent and 0.8 per cent, respectively.

On the weekly front, the BSE benchmark dropped 1,047.52 points or 1.30 per cent, and the Nifty fell 338.7 points or 1.39 per cent. Most sectors bore the brunt of the decline, with realty, banking, pharma, and financial services stocks recording the steepest losses, falling between two-six per cent. However, select segments such as auto and media, that emerged as top gainers, bucked the trend and were resilient, partially cushioning the overall downside.

Sensex, Nifty, and Bank Nifty technical levels to watch

From a technical perspective, stock market analysts said that the benchmark Nifty 50 index is currently hovering around key moving averages across various timeframes, suggesting the potential for a further downside. 

“The immediate support is placed at 23,800, and a decisive break below this could extend the decline toward 23,200. On the upside, any rebound is expected to encounter strong resistance between 24,400–24,600," said Ajit Mishra, SVP, Research, Religare Broking.

Nifty formed a bearish engulfing pattern on the weekly chart, suggesting further corrective moves in the near term. "A breach below 23,800 may invite selling pressure toward 23,500, which aligns with the 21-week EMA. On the upside, resistance lies at 24,250, and a move beyond this could push the index toward 24,500,” said Puneet Singhania, Director at Master Trust Group.

Bank Nifty ended the week lower by 2.76 per cent after three straight weeks of gains, closing below its 21-day EMA, which is positioned near 53,800. “The breakdown marks a bearish shift, breaching the recent consolidation range on the downside. The crucial support is seen near 52,900, which aligns with the 61.8 per cent Fibonacci retracement level of the recent rally,” said Singhania.

"On the upside, the 54,000–54,200 zone acts as a strong resistance. A sustained move above this may pave the way for a short-term rally toward 55,000," he added. Religare's Ajit Mishra said the banking index is exhibiting a relative weakness and may continue to underperform. 

“It faces immediate support at 53,000, with a more robust support level near 52,400. Conversely, a sustained close above 55,000 could open the path for an upward move toward 56,000," said Ajit Mishra of Religare Broking.

D-Street trading strategy for next week

Looking ahead, the heightened geopolitical tensions have substantially increased market volatility, as evidenced by the spike in the India VIX. “In this environment, investors are encouraged to adopt a stock-specific approach and avoid aggressive positioning until greater clarity emerges.”

"Employing a hedged strategy is advisable to mitigate near-term risks, while close attention to geopolitical developments will be critical in determining the market's direction moving forward," said Religare's Ajit Mishra.

For Nifty 50, Puneet Singhania said positional traders may consider a buy-on-dips approach near the support zone. For Bank Nifty, Singhania said traders are advised to stay cautious and adopt a sell-on-rise strategy amid increased volatility across broader indices.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.