NIFTY,BANKNIFTY,S&P 500 – Correction Unfolds, Volatility ReturnNifty 50 IndexNSE:NIFTYssudhirsharma11Nifty closed the week at 25,683, sharply down ~650 points from the previous week. The index formed a high of 26,373 and a low of 25,623, confirming that trending moves have returned after the holiday season—exactly as anticipated. The previously defined 26,700–25,900 range has been decisively breached, with price taking temporary support near the 25,600 zone. Technically, Nifty has printed a strong bearish outside bar, engulfing the entire price action of the last 7 weeks—a clear sign of distribution and momentum shift. 25,600 – Acceptance vs Rejection Zone This level will decide the next swing: Acceptance above 25,600 (higher lows / stable closes) → scope for a technical pullback Repeated rejection below 25,600 → continuation of the corrective move Pullback Scenario (Corrective Bounce) If Nifty manages to hold above 25,600, a bounce towards: 26,000 26,150 These zones should be treated as supply / short-on-rise areas, not fresh breakout levels. Downside Risk (Continuation) If 25,600 fails on a closing basis, next supports lie at: 25,400 25,250 Expected Trading Range (Next Week): 26,150 – 25,250 Bigger Picture – Why Caution Is Warranted As highlighted in my 27th December post, Nifty was trading at extremely overbought levels on the yearly chart, signaling an impending correction. What adds to the concern is that the December low has already been broken this month. As long as this remains the case, any bounce should be treated as corrective, not a trend reversal. This phase resembles a healthy corrective reset after momentum excess, not a structural bear market—yet volatility will stay elevated. Investor Strategy – Build the Shopping List Corrections create opportunities. This is the right time to track fundamentally strong stocks and names where smart money (FII & DII) is steadily increasing exposure. During recent scans, I’ve identified multiple stocks trading near: Monthly EMA 200 Weekly WEMA 200 These zones often act as high-probability accumulation areas. I’ve started building my shopping list—have you? BANK NIFTY – RELATIVE WEAKNESS EMERGES Bank Nifty, the most volatile index of the Indian market, failed to sustain above the crucial 60,092 Fibonacci level and closed at 59,251, down nearly 900 points for the week. This relative underperformance is a warning sign—sustainable Nifty recoveries need bank participation. Downside Levels: Daily close below 59,000 → DEMA 100 at 57,865 DEMA 200 at 56,250 Upside Cap: Near-term upside remains capped at 60,200–60,300 S&P 500 – ATH CONTINUES, TRAIL PROFITS STRICTLY The S&P 500 closed at a fresh all-time high of 6,966, with momentum pointing towards the key Fibonacci level of 7,026. Risk Management for US Market Participants: Trailing stop-loss: Consecutive daily close below 6,826, OR A confirmed close + follow-through below DEMA 100 (6,687) This helps avoid single-day whipsaws near moving averages. Bonus Tip for Nifty Traders Trail existing short positions 26,000 remains a strong supply zone and can be used to initiate fresh shorts on pullbacks