Nifty 50 Weekly Outlook: Key Market Drivers

Last week, from May 12, 2025, to May 16, 2025, the Nifty 50 index closed 4.21% higher. This was the result of a ceasefire between India and Pakistan after a short period of intense armed conflict between the two countries. 

Let us look at what weekly Nifty 50 technical analysis signals and events that investors must look for in the current week, May 19, 2025, to May 23, 2025. 

Market Recap: May 12 – May 16, 2025

The Nifty 50 index closed the previous week on a positive note. Here are the OHLC (Open High Close Low) levels for the Nifty 50 index for the previous week: 

The high (25,116) reached in the previous week was the highest point for the Nifty 50 index in 2025. 

The market reached these levels after making a low of 21,743 on April 7, 2025, following the tariff announcement by the US government. This marks a recovery of 15.5% in a span of a little under two months. 

Here is what other Indian stock market indices moved in the previous week: 

Reasons for the Positive Performance 

The primary reasons for the positive Indian stock market trends in the previous week are: 

• FII/DII Activity: In the previous week, one of the key reasons for positive market movement was the buying done by FIIs and DIIs in the Indian market. FII and DII were both net buyers of equity in the previous week, with FIIs buying to the tune of ₹15,000 crores. 

Source: Stockedge

• Ceasefire News: After the terrorist attack on Pahalgam, the Indian government retaliated against Pakistani terrorists. This event led to an exchange of fire between the two countries, which was followed by a quick ceasefire. 

The ceasefire news was considered positive for the markets since any chances of a major escalation quickly disappeared. 

Weekly Nifty 50 Technical Analysis

Let us take a look at the Nifty 50 price action for the previous week: 

Source: Tradingview, Nifty 50, Daily chart with RSI indicator. 

• Last week, the index temporarily moved above its key resistance zone of 24,700 – 24,800. In the current week (as of May 20, 2025), the price slipped below the resistance zone and closed at 24,683 level. 
• The index is also forming a bearish divergence on the daily chart with the RSI indicator. This shows a slightly weakening momentum. 

There is no major Nifty 50 chart pattern forming on the daily charts. 

Nifty 50 Trading Strategies

Here are some key Nifty 50 support and resistance levels to watch on the daily chart. 

Positive Signal

Source: Tradingview, Nifty 50, 30-minutes chart. 

• The two red horizontal lines depict the 24,700 – 24,800 resistance zone on the 30-minute chart. 
• This zone was temporarily broken twice, and both attempts were false breakouts, and the price quickly slipped back into that zone. 
• A short-term positive sign for the index would be a decisive break above this level. A break above this level would indicate a bullish move. 
• A daily chart close above 25,000 will also be a bullish sign for the index. 

Negative Signals

Source: Tradingview, Nifty 50, 30-minutes chart. 

• The 24,500 – 24,600 level is the nearest support zone for the index. A breach of this level can be a bearish sign. 
• If the index falls below this level, the chances of the index moving towards the 24,000 level will increase. 

Key Factors to Watch for the Current Week 

These events must be closely monitored by the market participants in the current week, as they can significantly influence the Indian stock market trends: 

• Home Sales Data: On Thursday, US home sales data for the month of April will be released. This data is closely monitored by the US Federal Reserve and can provide insights into the US interest rates trajectory. This event can influence global markets. 
• US-Russia Talks: The US president and the Russian president held talks regarding the Russia- Ukraine conflict. Any ceasefire news on that front can be positive for the stock markets worldwide. 
• India-Pakistan Conflict: Although a ceasefire has been declared and respected by both countries. Any developments on the India-Pakistan conflict warrant close attention, especially by Indian investors. 

Performance of Other Assets and Markets 

Here is the performance of other markets and asset classes in the previous week: 

The markets all around the world gave a positive performance in the previous week. This shows the positive sentiment worldwide. 

The gold futures on MCX also eased 4.22%, showing decreasing investor worries. (Gold rises with high uncertainty) 

Conclusion 

The first two days of the current week, May 19 and May 20, 2025, were slightly negative for the Nifty 50 index. Still, the index is trading above its major support level. The Indian stock market participants must closely watch the news, price action and economic data to gauge the future direction. Stop losses must be used in times of increased uncertainty. Traders can visit numerous online platforms to access charting and market tracking tools.