Nifty Momentum Faces Test: Analysts Flag Resistance At 25,500; Trump’s Tariff War Clouds Outlook

Indian equity markets are poised for a cautious start as escalating trade tensions between US and China weighed on market sentiment. 

Will Indian markets buck the trend and momentum favor the bulls this week? SEBI-registered analysts shared the trade set-u for Monday on Stocktwits.

Trade Setup For October 13

Analyst Bharat Sharma of Stockace Financial Services highlighted that global markets saw a selloff on Friday following US President Donald Trump’s announcement of a 100% increase in tariffs on Chinese imports. He said that the world now finds itself in a critical transition period where traditional economic theories seem to have lost relevance, while new economic structures, often referred to as “edge economies,” are still in the early stages of formation. 

However, US President Trump, in a recent social media post, said that trade ties with China “will all be fine,” following a volatile week of policy reversals. Speaking of the impact on India, Sharma noted that the GIFT Nifty indicated a relatively smaller hit for our markets. But technical factors indicated that the Nifty may still feel some pressure at the start of the new week. 

According to Sharma, a weekly chart showed a descending trendline that began at 26,200, intersected 25,600, and now aligned with the 25,400–25,500 range. For the Nifty to maintain a bullish stance, it must break above this sloping resistance line convincingly. On the other hand, another rejection from this area could push the index back into a sideways consolidation zone, with support near 24,400 on the downside. He highlighted that the Nifty has already moved between 24,400 and 25,500 for nearly 20 weeks, and a decisive break below 24,400 would likely signal a renewed negative trend.

For intraday or short-term traders, Sharma flagged two main scenarios. In a gap-down opening near 25,130–25,100, he advised traders to wait for the formation of the first two candles before taking positions. The 25,200–25,250 range is seen acting as an important resistance zone for recovery attempts, while 25,000 will serve as a crucial support level that must hold to avoid a sharp downside reaction.

On the downside, immediate support is seen at 25,250–25,260, followed by levels at 25,200, 25,130, and 25,000. Immediate resistance is seen near 25,330, which, if breached, can take the Nifty towards 25,400, 25,450, and 25,500.

Sunil Kotak highlighted that Foreign Institutional Investors (FIIs) have remained buyers for the fourth session. The technical setup for Nifty remained positive with the Relative Strength Index (RSI) crossing 60 on the daily chart, supported by strong volumes. He expects the index to test 25,550 soon, and once these levels are crossed, the potential for Nifty to cross 25,800 in the next one to two weeks is higher. He cautioned that the only risk to this bullish market momentum is any likely policy or tariff actions by US President Trump.

Varun Bhargav, Founder of ProfitXResearch, added that the Nifty index remains in a distribution zone. He prefers to sell on strength at higher levels rather than chase momentum, adding that risk management is key in this phase. 

For commodities such as gold and silver, he recommended a buy on dips as metals continue to show structural strength.

A&Y Market Research sees Nifty resistance between 25,317-25,333, with support at 25,215-25,246. For Bank Nifty, they see resistance at 56,588-56,632, and support at 56,133-56,205.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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