IGI Logo

Nifty :24028

The Indian equity benchmark witnessed a sharp decline today, plunging 1.70% to close at 24,028, as a surge in Brent crude toward $120 triggered a broad-based risk-off sentiment across the market. Broader market turned negative with an A/D ratio of 1:4, where in Mid and smallcap has relatively underperformed with a loss of 2% each. Sectorally baring IT, all other indices closed in red wherein Auto, BFSI were the top losers

Technical Outlook:

* The index started the week on a gap-down note amid intensifying geopolitical tensions in the Middle East and a sharp spike in crude oil prices. However, during the latter half of the session, the index witnessed supportive efforts from lower levels near 23,700 as crude prices cooled slightly from their intraday highs. As a result, the daily price action formed a small bull candle indicating intraday recovery. However, overhead negative gap suggest continuation of corrective bias

* Index is set for a strong gap-up opening today, tracking a sharp recovery in global sentiment regarding a potential de-escalation of geopolitical concerns and decline in crude oil prices. Going ahead, index need to fill the Monday's gap and decisively close above the 24400 mark to confirm the pause in corrective bias that would open the door for pullback towards initial milestone of 25000-25200. Further, sustainability in crude oil prices at lower levels along with development on geopolitical de-escalation would boost the market sentiment. However, in the process bouts of volatility cannot be ruled out, wherein key support is placed at 23,500 levels based on following observations:

* A) 61.8% retracement of April25-Jan26 upmove(21743-26373)

* B) 52 weeks EMA has the utmost importance from long term perspective in technical analysis. Past three decades data shows that, in a secular bull market secondary correction tend to find its feet 6-7% below its 52 weeks EMA. In current scenario such correction would mature around 23500

* C) Positive Gap aera seen during mid-April 2025 (22924-23207)

* Last four decades there have seen six major geopolitical escalations. Each occasion formed a major bottom once the anxiety around the event settles down. Though geopolitical events remain unsettled, portfolio construction during such phases has historically been fruitful from medium term perspective, delivering double digit returns in subsequent three months

* Market Breadth: With current decline, the % of stocks above 50- and 200-days SMA have once again pulled down to 22% and 26% levels. Historically, such contractions in breadth have preceded durable market bottoms, with extreme bearish readings in the range of 15-20%

Key Monitorable:

* Brent Crude Oil: After a strong gap-up opening, Crude oil has witnessed profit booking near its 80% retracement of its previous decline ($138 - $58), indicating selling pressure at key moving average.

* US & India Inflation print.

Intraday Rational:

* Trend- Lower high-low formation for three consecutive session

* Levels- Buy around Mondays close

Nifty Bank :56020

Nifty Bank concluded the session on a weak note, settling at 56,020 with a significant cut of 3.1%. The Nifty PSU Bank Index sharply underperformed the benchmark, sliding 4.3%.

Technical Outlook:

* The index commenced the week with a significant gap-down opening. However, a minor recovery was observed from the 80% retracement level of the August 2025-February 2026 rally (53,606- 61,764), positioned around 55,200. Despite this bounce, the daily price action formed a bearish candle, marking a decisive close below the 200-day EMA a level that had held firm since June 2025.

* The index is likely to witness gap up opening tracking strong recovery in global equities tracking cool off in crude oil prices. Notably, the index has corrected nearly 6,400 points over the past fortnight that hauled index near lower band of rising channel amid oversold conditions, indicating possibility of pullback can not be ruled out. However, to pause the ongoing corrective move, the formation of higher high-low along with a filling up of Monday’s negative gap (57696-56247) on a closing basis would be a prerequisite.

* Meanwhile, 55,200 zone remains a key important support as it aligns with both the above-mentioned 80% retracement and the lower boundary of a rising channel (extending from the June 2022 low of 32,290).

* Structurally Since April 2025 Index has been holding firm above its 52-week EMA. In current scenario it has once again approached its long-term key moving average(56600). Historically data shows that, in a secular bull market, secondary corrections tend to get anchored 3% below its 52 weeks EMA. In current scenario, that correction would mature around 54900.

* The PSU Bank Index formed a bearish candle and found some support near the February 2nd gap area (8,601–8,702). As long as the index sustains above Monday’s low of 8,600, the possibility of a technical pullback toward 9,200 remains open

Intraday Rational:

* Trend- Lower high-low formation for three consecutive session

*  Levels- Buy around Mondays close

Please refer disclaimer at https://secure.icicidirect.com/Content/StaticData/Disclaimer.html

SEBI Registration number INZ000183631