Nifty reclaims 200-week average; resistance tests rebound

Nifty rose 625.70 points, or 2.78%, over the week, climbing back above its 200-week moving average at 22,651.47. In an October 17 technical review published by Economic Times Markets, analyst Milan Vaishnav described the recovery as a reprieve for the index’s long-term chart structure, rather than confirmation that its downward pressure had ended.

The index moved within an 861.40-point range during the week, while the review’s weekly volatility measure declined 2.23% to 14.06. The advance reversed some of the weakness of preceding weeks, when Nifty had slipped below the long-term average.

Resistance remains above the recovery

Vaishnav identified 23,300 and 23,550 as the next resistance levels, with support at 22,950 and 22,650. Nifty remains below its 20-week, 50-week and 100-week moving averages, leaving several barriers to a sustained advance.

The broader 22,500–22,650 area is particularly important in his chart assessment: a horizontal boundary of the index’s consolidation structure meets the 200-week average around this zone. Moving back above that area has eased the immediate risk of a deeper technical breakdown, but the index must hold the recovery.

Momentum indicators have not yet endorsed a stronger turn. The weekly relative strength index stood at 42.29, below the neutral threshold of 50, with no divergence against price. The weekly moving average convergence divergence indicator remained bearish and below its signal line.

The review anticipated consolidation in the coming week rather than an unimpeded rise. It also noted that trading would be shortened by the Dussehra holiday on Tuesday, October 20.

Banks, metals and IT among relative leaders

Vaishnav’s Relative Rotation Graph assessment placed the Nifty Bank, Metal, Media, Pharma and IT indices in the leading quadrant against the broader Nifty 500 benchmark. Metals, however, showed some weakening in relative momentum.

Realty, Midcap 100 and Auto remained in the weakening quadrant. FMCG was in the lagging quadrant, alongside Energy and Infrastructure, although the latter two were improving in relative momentum.

Financial Services, PSU Bank, PSE and Services Sector indices occupied the improving quadrant. These classifications describe performance relative to the benchmark; they do not constitute standalone buy or sell signals or guarantee absolute gains.

Selective exposure, not a chase

Vaishnav advocated a cautious approach: watch whether Nifty can sustain above its 200-week average, avoid pursuing sharp price jumps and favour stocks with stronger relative performance and improving technical structures. He suggested trailing stop-losses for profitable holdings and selective, staggered additions to exposure.

Those recommendations are the analyst’s technical views, not a certainty about the market’s next move.