Market Outlook: No Technical Evidence of a Steep Decline

The Indian stock market has been experiencing a range-bound consolidation phase in recent times. The analysis of Relative Rotation Graphs (RRG) suggests that certain sectors, such as Nifty Realty, NiftyBank, Consumption, and Financial Services, are likely to outperform the broader Nifty 500 Index. However, investors should remain cautious and vigilant in their approach.

According to a review of Relative Rotation Graphs, various sectors were compared against CNX500 (Nifty 500 Index), which represents over 95% of the free float market cap of all listed stocks. While there is no technical evidence indicating a steep decline, it's unlikely that we'll see a significant up-move in the market without a convincing break above the 18,350-18,500 zone.

The technical structure of the markets suggests that ranged consolidation may continue, with selling pressure persisting at higher levels. This resistance zone around 18,350-18,500 is crucial for the index, making it essential to approach the market selectively and protect profits vigilantly.

Currently, the Nifty Index trades near another pattern resistance point of 18,389, which has been a stubborn resistance level in the past. The index has resisted this trendline multiple times before crossing above it and taking support on it twice. Furthermore, the pattern analysis indicates that Nifty is playing out well to the falling trend line that begins from 18,600 and joins the subsequent lower tops.

In conclusion, while there are some positive signs in certain sectors, investors should not get complacent and should remain cautious in their approach. The market remains range-bound, and it's essential to be selective and vigilant in order to navigate this phase successfully.

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