Stock Market Next Week: After a Stellar Run, Caution Sets In as Experts Decode What’s Next for Nifty50, BSE Sensex and Bank Nifty

Indian equities ended lower on Friday, October 24, 2025, as the BSE Sensex and NSE Nifty gave up gains after hovering near record highs in the previous session.

The rally that had gathered momentum on Thursday lost steam amid fading optimism over a potential US-India trade deal, following the government’s reluctance to confirm reports of an imminent agreement.

The Sensex closed 344.52 points lower at 84,211.88, while the Nifty 50 fell 96.25 points to 25,795.15, marking a pause in the market’s recent six-day winning streak.

Stock Market Next Week: Expert Outlook
Nifty View
Sudeep Shah, Vice-President & Head of Technical and Derivatives Research at SBI Securities, said: “The Indian equity market has been on a remarkable run this October, with the benchmark index Nifty clocking an impressive rally of over 1,500 points from its low of 24,588 — all within just 15 trading sessions. This swift upward move reflected strong bullish momentum, supported by festive optimism, robust domestic flows, and improving global sentiment.”

During the Diwali week, Nifty came within striking distance of its all-time high, sparking hopes of a fresh breakout. However, the index couldn’t sustain the momentum and faced profit booking, suggesting that investors may be turning cautious after the sharp run-up.

“This pause in momentum has led to the formation of a Shooting Star-like candlestick pattern on the weekly chart, a sign that the uptrend may be losing steam,” Shah explained.

He added, “The pattern suggests that bulls tried to push prices higher but faced resistance. However, for this to signal a true reversal, a confirmation candle — typically a bearish follow-through — is needed. The daily RSI had touched a high of 72.69, and since then, it has dropped to 67.19, currently in a falling mode, which adds to the cautious tone.”

Shah said the market is also waiting for details of the India-US trade deal, which could be a key trigger for the next move.
“With technical indicators cooling off and macro developments in focus, the next few sessions will be crucial in deciding whether this is just a pause or the beginning of a deeper correction,” he said.
 

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Talking about levels, Shah added, “The zone of 25,550–25,500 will act as crucial support for the index as it is the confluence of the 13-day EMA level and 38.2% Fibonacci retracement level of its recent upward rally (24,588–26,104). On the upside, the zone of 25,950–26,000 will act as a crucial hurdle. Any sustainable move above 26,000 will lead to a sharp upside rally up to 26,300.”

Sensex View
“October began with a burst of optimism and strong buying interest, setting the stage for a sharp rally in the Sensex. On October 1, the index formed a Bullish Engulfing candlestick pattern on the daily chart. What followed was a powerful move — the Sensex jumped over 5,000 points in just 14 trading sessions,” Shah said.

However, after hitting a high of 85,290, the index faced profit booking, indicating that traders may be turning cautious after the steep rise.
“This shift in momentum led to the formation of a Gravestone Doji candlestick pattern on the weekly chart, which typically signals trend exhaustion. The pattern reflects an attempt by bulls to push prices higher, only to be met with resistance,” Shah explained.

Adding to the cautious tone, he said, “The daily RSI, a key momentum indicator, had touched a high of 72, entering overbought territory. It has since cooled off and is currently quoting around 67.19, showing signs of a falling trend and weakening strength.”

“With technical indicators softening and profit booking setting in, the next few sessions will be crucial in determining whether this is a temporary pause or the beginning of a broader correction,” he said.

Going ahead, Shah noted, “The zone of 83,350–83,250 will act as a crucial support for the index as it is the confluence of the 13-day EMA level and 38.2% Fibonacci retracement level of its recent upward rally (24,588–26,104). While on the upside, the zone of 84,700–84,800 will act as a crucial hurdle. Any sustainable move above 84,800 will lead to a sharp upside rally up to 85,500.”

Bank Nifty View
“The banking benchmark index, Bank Nifty, marked a fresh all-time high on Thursday, reflecting strong sectoral momentum and investor confidence. However, the index couldn’t sustain above the crucial 58,500 level and soon after witnessed profit booking, indicating a temporary shift in sentiment after the sharp rally,” Shah said.

“This pullback led to the formation of a Shooting Star candlestick pattern on the weekly chart, a technical signal that often points to trend exhaustion. The pattern suggests that bulls attempted to push prices higher but were met with resistance, resulting in a potential pause or reversal in the uptrend,” he added.

“Adding to the cautious tone, the daily RSI has also shown signs of weakness. After touching a high of 76, the RSI has now given a bearish crossover and is currently trending lower, which typically signals a cooling-off in momentum and a possible consolidation phase,” he said.

“With Bank Nifty at a critical juncture, traders will be watching closely for confirmation signals in the coming sessions. Whether this is a temporary breather or the start of a broader correction will depend on price action in the next couple of trading sessions,” Shah noted.

Talking about crucial levels, he added, “The zone of 57,000–56,900 will act as important support for the index as the 38.2% Fibonacci retracement level of its recent upward rally is placed in that region. While on the upside, the zone of 58,200–58,300 will act as a crucial hurdle. Any sustainable move above 58,300 will lead to a sharp upside rally up to 59,000, followed by 59,500 in the short term.”

FIIs Positioning
While FIIs have turned buyers in recent sessions, Shah pointed out that it’s too early to say they have fully returned.
“Over the past three months, they have sold equities worth ₹1.29 lakh crore, and despite being buyers in 9 out of 15 sessions this month, the net outflow still stands at ₹866 crore,” he said.

“The long-short ratio in index futures has risen from 6% to 24%, indicating that much of the recent Nifty rally stems from short covering rather than fresh long positions. FIIs remain cautious, watching developments around the India–US trade deal and the Bihar elections in November. Sustained confidence could see them return more decisively, driving markets higher,” he added.

Sectors in Focus
From a technical perspective, Shah said several sectoral indices are showing signs of continued strength and are likely to outperform in the short term.
“Leading the pack are Nifty Metal, IT, CPSE, Realty, and Oil & Gas, all of which have maintained bullish momentum supported by favourable chart structures and strong relative strength,” he said.

“These sectors have shown resilience even during broader market pauses,” he added.
“On the flip side, Nifty Media continues to lag behind and is likely to underperform in the near term. Weak price action and lack of buying interest have kept the index subdued, and technical indicators suggest limited upside unless a strong reversal pattern emerges,” Shah noted.

Stocks in Focus
Technically, Cummins India, Blue Star, Hindalco, and Chola Finance are looking good, said Shah.