Indian markets faced headwinds this week, with benchmark indices closing in negative territory amid concerns over rising crude oil prices and a strengthening US dollar. Supply-side pressures continued to push crude prices upward, while the dollar index gained strength, further dampening investor sentiment.The benchmark BSE Sensex concluded Friday’s trading session at 77,378.91, down 241.30 points or 0.31%. The broader Nifty 50 index also closed lower, declining 95.00 points or 0.4% to 23,431.50.Analyst Sudeep Shah, Deputy Vice President and Head of Technical & Derivatives Research at SBI Securities interacted with ET Markets regarding the outlook on Nifty and Bank Nifty along with an index strategy for the upcoming week. Following are the edited excerpts from his chat:Nifty, Bank Nifty, and Sensex are all comfortably below their 200 DEMAs. Let's discuss your very broad overview of how the markets are looking.On Thursday, TCS officially kicked off the Q3 earnings season, setting the stage for what could be a defining period for the markets. With investors closely monitoring corporate performance amid global and domestic challenges, these results will likely play a pivotal role in shaping market sentiment. As the earnings unfold, the focus will remain on growth trajectories, margin pressures, and management outlooks, making this season a potential make-or-break moment for market direction.On the daily chart, Nifty and Sensex are at their support. Where do you think these indices will go from here now?Technically, the prior swing low zone of 23,260-23,200 will act as crucial support for the index. If the index slips below the level of 23,200, then we may witness further correction in the index up to the 22,800 level. While, on the upside, the 200-day EMA zone of 23,670-23,700 will act as a crucial hurdle for the index.For Sensex, the zone of 76,800-76,700 will act as a crucial support for the index. If the index slips below the level of 76,700, then we may witness further correction in the index upto the 75,500 level. While, on the upside, the 200-day EMA zone of 78,000-78,100 will act as a crucial hurdle for the index.Even the monthly chart displays weakness, with the index below its 10-month exponential moving average. Is it likely that the index go down to the level of a 20-month EMA?If Nifty slips below the level of 23,200, then the index is likely to test the 22,800 level. Further, if the index slips below the level of 22,800, then it is likely to test the 20-month EMA, which is currently placed near the 22,390 level.Coming to Nifty Bank. What is the outlook now? It seems to have a worse placement than Nifty. 200 DEMA breached, no crucial support seen near current levels. How to navigate this index?For the fifth consecutive trading session, the banking benchmark index Bank Nifty has been trading below its 200-day EMA level, which is a bearish sign. Currently, it is trading below its 200-day EMA level by more than 3%. Further, the daily RSI is currently quoting at 28.50 level, which was the lowest level since October 2023.This indicates an overall strong bearish momentum in the index. Talking about levels, the zone of 48,250-48,200 will act as immediate support for the index. Any sustainable move below the level of 48,200 will lead to a sharp correction up to the 47,500 level. While, on the upside, the zone of 49,200-49,300 will act as a crucial hurdle for the index.How do you read the current FII-DII activity?The recent FII-DII activity highlights contrasting approaches in the market. Over the last five sessions, FIIs have been net sellers, offloading equities worth 18,826.82 crore. Meanwhile, DIIs have counterbalanced this by buying equities worth 18,541.44 crore, reflecting confidence in domestic market resilience. This tug-of-war indicates cautious sentiment, with domestic institutions stepping in to provide stability amid FII outflows.In the larger picture, what would be your advice for the traders amid these volatile times?Amid volatility, focus on risk management by using strict stop losses and avoiding oversized positions. Align your trades with the broader trend and prioritize capital preservation over aggressive moves. Patience and discipline are key during such times.Nifty FMCG seems to have taken support and bounced back recently. Do you find any comfort in that space?Yes, Nifty FMCG has been strongly outperforming the frontline indices in recent sessions. The ratio chart of FMCG against the Nifty is trading above its 100-day EMA, indicating relative strength. However, a sustained move above the 200-day EMA zone of 58,200–58,300, which aligns with the neckline of an Adam & Adam Double Bottom pattern, is crucial for further upside. If the index crosses 58,300, it could trigger a sharp rally. On the downside, the 56,700–56,600 zone will act as immediate support.Meanwhile, the Nifty Pharma index seems to be encountering some resistance at higher levels. What is your take, given the outperformance of the stocks in this sector?In the last week of December, the Nifty Pharma index was strongly outperforming the frontline indices. However, it has marked a high of 23,604 and thereafter witnessed a selling correction. Most noteworthy, the index slipped below its 20 and 50-day EMA level. These averages started edging lower. Further, the daily RSI has given a trendline breakdown. Going ahead, the 100-day EMA zone of 22,350-22,300 will act as immediate support for the index. Any sustainable move below 22,300 will lead to further selling pressure in the index. While, on the upside, the zone of 22,750-22,800 will act as a crucial hurdle for the index. Any other sectors you would like to pick?Nifty IT has given a consolidation breakout on a daily scale. Also, it has surged above its short and long-term moving averages. The daily RSI has given a bullish crossover. Hence, we feel it is likely to outperform in the short term. Any stocks to look out for within these sectors?Stocks like HCL Tech, Infosys, and LTIM are showing promising setups on the charts. However, with their Q3 results scheduled for next week, it’s advisable to avoid entering at current levels and wait for post-results clarity to make informed decisions.Are there any well-placed stocks for the traders to place their bets on?MARICO: The stock is strongly outperforming the frontline indices. Also, it is trading above its short and long-term moving averages. The daily RSI is in bullish territory. Hence, we recommend accumulating the stock in the zone of Rs 680-670 level with a stop loss of Rs 650 level. On the upside, it is likely to test the level of Rs 710, followed by Rs 730 in the short term.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)