NIFTY Hits New Highs but Breadth Weakens — What’s the Signal?

The NIFTY 50 closed the week with a neat gain of 134.80 points (0.52%), touching fresh lifetime highs of 26,310.45.
Sounds impressive, right?
Yes — but there’s a twist.
A deeper look shows the Nifty 500 is still over 2.5% below its all-time high.

Meaning? This rally is not broad-based — it’s being carried by select large-cap heavyweights.
Meanwhile, the India VIX dropped 14.77% to 11.62, keeping volatility calm… for now.

◉ Key Levels to Watch This Week

Support Zones
● 26,000 — Strong and immediate support. Heavy put writing is visible here.

Resistance Zones
● 26,200 – 26,300 — Near-term supply zone
● 26,500 — Major resistance to beat

◉ Key Triggers This Week

1. RBI Policy – December 5
A 25 bps rate cut is widely expected, but the RBI may take a cautious approach as it balances low inflation with rising growth momentum.

2. Q2 GDP at 8.2%
The stronger-than-expected GDP print boosts sentiment but reduces the urgency for aggressive rate cuts, shifting the policy outlook toward a more measured stance.

3. India–US Trade Deal
Both countries are close to finalizing the agreement by year-end, which could support IT, manufacturing and export-focused sectors.

4. Rupee Weakness
The rupee’s slide to ₹89.49/$ raises import costs and potential inflation risks, adding pressure on the RBI while impacting corporate margins differently across sectors.

◉ December Outlook — What’s Likely Ahead?
● Base Case: NIFTY stays in a 26,000–26,500 range, with most upside already priced in.
● Bull Case: A breakout above 26,500 could send it toward 26,700 by month-end.
● Caution: If market breadth weakens further, volatility may creep back in.

◉ Strategy:
● As long as NIFTY holds above 26,000, sentiment stays positive.
● Dips above 26,000 = buying opportunity
● Avoid chasing breakouts blindly — focus on quality sectors and high-volume confirmations.