Indian equity benchmark started the week on a positive note, staging a smart recovery after Friday’s sharp sell-off - ICICI Direct
Nifty :25682
Day that was..
Indian equity benchmark started the week on a positive note, staging a smart recovery after Friday’s sharp sell-off. Nifty settled the day at 25,682 with a gain of 0.80% led by gain is index heavy-weight stocks. However, the broader market has relatively underperformed the benchmark wherein midcap index gain 0.50%. Sectorally, Barring Auto, all other indices closed in green wherein BFSI, Realty were the top performers
Technical Outlook:
• The Index open the week on a flat note; however supportive efforts emerged around 50% retracement level of previous up-move(24,679- 26,341), coinciding with positive gap up zone recorded on 3rd February, 2026 . As a result, the daily price action formed a strong bullish engulfing candle, indicating buying demand emerged from elevated levels.
• Key point to highlight is that, index staged a strong rebound from the 25400 zone a level that previously acted as resistance and has now transitioned into support in line with the principal of change in polarity. Additionally, The decisive close above the prior session high reinforces bullish intent and signals strengthening upward momentum in the nearterm. We expect index to find a follow through strength in coming session and eventually head towards its previous swing high of 26,000. Hence any dips from current level should be used a “buy-on dips” strategy wherein focus should be on accumulating beneficiaries of trade deal of India with US & European Union, as strong support is placed around 25,200 being 200-day EMA and 61.*% retracement of previous upmove (24,571-26,341).
• On the broader market front, Nifty midcap index has rebounded from 52 weeks EMA which has been held firm since past nine months while small cap index witnessed sharp pullback from lower band of six months falling channel. The improving market breadth would result into broadening of the ongoing rally.
• Market breadth has been witnessing improvement, as the percentage of stocks trading above their 50 days SMA has bounced from bearish extremes of 15% to 45% levels, while percentage of stocks above 200- day SMA within the Nifty 500 universe enhanced to 39%. Historically, such contractions in breadth have preceded durable market bottoms, with extreme bearish readings near 15%.
• Sectorally, Since CY-06, on four occasions IT index has witnessed a maximum price wise correction of 34% and time wise correction of 6-7 quarters. Post such phases, the index has typically made new highs. With current week’s sharp decline, it has completed 30% correction. Thereby focus should be on accumulating quality IT stocks in a staggered manner as it approaches maturity of price and time wise maturity
Key Monitorable:
• US GDP data
• Brent Crude: Once again retreated from key hurdle of $70-72 range. Only a decisive close above $72 would fuel the momentum for next leg of up move
Intraday Rational:
• Trend- Supportive efforts emerged around 200-day EMA
• Levels- Buy around 61.8% retracement of yesterday upmove(25436- 25728
Technical Outlook
Day that was:
Bank Nifty outperformed the broader market for a large part of the session, driven by a sharp rally in Private banks heavy-weights. Index settled the day at 60949, up 1.20%. The Nifty PSU Bank has extended its gains and clocked a fresh All-time high to closed up 1.50%.
Technical Outlook:
• Index started the week on a flat note and witnessed supportive efforts in the vicinity of 20-day EMA. The daily price action has formed bullish engulfing candle, indicating strong buying demand near key moving average.
• Key point to highlight, index has recovered it’s past five-session entire decline in a single session, indicating faster pace of retracement. In line with our view index has witnessed a sharp rebound after undergoing a healthy retracement near its key psychological level of 60000 mark, indicating resumption of uptrend after higher base formation near key levels. This structural strength reinforces our bullish bias and supports maintaining a positive outlook going forward. We expect Index to gradually resolve higher and challenge its prior swing high of 61800 levels in coming weeks.
• On a broader perspective Index has staged a strong rebound from its previous resistance, now acting as support(57628) in line with the change-of-polarity principle, indicating resumption of uptrend. Any corrective declines from current levels should be viewed as buying opportunities as strong demand zone is identified near 59,700, being 50-day EMA and 61.8% retracement of the current up move (57,783-61,674).
• Meanwhile, the Nifty PSU Bank Index clocked a fresh All time high outperforming the benchmark, reinforcing near-term bullish momentum. Going forward, the index is expected to advance toward the 9,600 zone, corresponding to the measured range breakout of the 8,702–9,175 band
Intraday Rational:
• Trend- Strong supportive efforts emerged near 20-day EMA and recovered prior five-session decline with a strong Engulfing bullish candle, indicating strong momentum ahead.
• Levels - Buy around 61.8% retracement of yesterday upmove (60131-61033).
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