Nifty ended its two-week shedding streak ending above the essential 100-day shifting common. In the meantime, worry index India VIX has cooled-off sharply by 20% through the week to shut close to 12 and any additional decline in volatility is anticipated to supply further consolation to the bulls.
With this, analyst Sudeep Shah, Vice President and Head of Technical & Derivatives Analysis at SBI Securities, interacted with ETMarkets relating to the outlook for the Nifty and Financial institution Nifty, in addition to an index technique for the upcoming week. The next are the edited excerpts from his chat:
Q: Nifty ended with weekly beneficial properties of 1.4% led by the India-US commerce deal managing to shut simply shy of 25,700. What do Nifty charts counsel for subsequent week of motion?
The previous week proved to be a high-voltage one for the benchmark index, with Nifty navigating an setting of elevated volatility. The index swung inside an enormous 1,662-point vary, marking its widest weekly motion since June 2024.
On Union Price range day, Nifty slipped sharply to an intraday low of 24,571, weighed down by considerations over the rise in STT on F&O transactions. Nevertheless, the weak spot was short-lived. A pointy 1,770-point rebound adopted as international danger sentiment improved after U.S. President Donald Trump introduced a right away discount in reciprocal tariffs on Indian items from 25% to 18%. This constructive set off propelled the index to an intraday excessive of 26,341, reviving hopes of a contemporary all-time excessive.
That optimism, nevertheless, light shortly. Inside the very first minute of commerce, Nifty witnessed a pointy 600-point intraday minimize, reflecting aggressive revenue reserving amid heightened volatility. Regardless of supportive international cues, the index did not decisively scale new highs, underscoring the delicate sentiment prevailing out there.
Within the latter half of the week, Nifty moved right into a part of sideways consolidation. Intense promoting stress in IT shares capped broader market beneficial properties, as rising considerations round latest developments in synthetic intelligence triggered apprehensions over the sector’s long-term progress outlook. Consequently, the Nifty IT index emerged because the worst-performing sector, ending the week with a pointy decline of 6.91%.
From a technical perspective, momentum indicators level in the direction of consolidation, suggesting that the index could proceed to oscillate inside an outlined vary earlier than a decisive directional transfer emerges.
Wanting forward, the 100-day EMA zone of 25,500–25,550 is anticipated to behave as fast help, adopted by 25,200. On the upside, the 25,850–25,880 area will stay a essential resistance band. A sustained transfer above 25,880 may open the door for additional upside towards 26,000, adopted by 26,200 within the close to time period, setting the stage for an additional try at increased ranges.
Q: February has historically been per week month but the beginning has to this point been fairly encouraging. What can be your recommendation to buyers who’ve a positional view on the markets and wish to make trades primarily based on this. Primarily based on the seasonality information and post-budget tendencies, are there particular sectors which stand a better likelihood to ship beneficial properties for the buyers?
Regardless of February being seasonally weak, post-Price range tendencies help a cautiously constructive positional strategy. Within the week following the Price range, Sensex has closed constructive 11 out of 15 occasions with a mean achieve of 2.10%, whereas Nifty has ended constructive 12 occasions with a mean achieve of 2.04%.
From a 3-month perspective, each Sensex and Nifty have delivered constructive returns 9 out of 15 occasions, with common beneficial properties of 6.77% and seven.40% respectively.
Sectorally, Pharma has been the strongest performer. Within the week submit Price range, Pharma has closed constructive 14 out of 15 occasions with a mean achieve of three.20% and a negligible common lack of simply 0.24% within the lone damaging occasion. Over three months, Pharma has delivered constructive returns 10 occasions with a mean achieve of seven.45%, whereas losses averaged only one.90%.
Monetary Providers has additionally proven consistency, closing constructive 11 occasions within the week submit Price range with a mean achieve of 2.93%, whereas the 4 damaging cases noticed a mean lack of 3.21%. From a 3-month view, Monetary Providers ended constructive 9 occasions with a mean achieve of 10.85%, whereas losses averaged 8.81%.
Q. What’s your view on Financial institution Nifty?
The banking benchmark index Financial institution Nifty registered a contemporary all time excessive of 61764 on Tuesday, reflecting continued energy within the monetary house. Nevertheless, the index failed to carry on to increased ranges, as revenue reserving emerged sharply within the latter half of the week. Regardless of this pullback, Financial institution Nifty ended the week on a robust word at 60120, delivering practically 3% weekly beneficial properties and forming a bullish candle accompanied by an extended higher shadow on the weekly chart — an indication of intraday volatility and promoting stress at elevated zones.
From a development perspective, the index stays comfortably positioned above all its essential shifting averages, reaffirming the resilience of the medium time period uptrend. That stated, momentum indicators and oscillators have began to flatten out, signalling a possible consolidation part or sideways motion because the market digests latest beneficial properties and awaits contemporary triggers.
Wanting forward, the 20 day EMA positioned between 59600-59500 is anticipated to behave because the fast and most essential help zone for the index. Holding above this area can be essential for sustaining the present bullish construction. On the upside, the band of 60400–60500 continues to behave as a robust provide zone. A decisive and sustained breakout above 60500 may reignite bullish momentum, paving the best way for a swift rally in the direction of 61200, and doubtlessly extending additional to 62000 within the quick time period.
Q: FIIs have remained internet consumers this week whereas INR has additionally managed to ship its greatest weekly closing in practically three years. Do you anticipate these reversals to maintain for markets to profit?
Whereas FIIs have turned internet consumers this week and the INR has posted its greatest weekly shut in practically three years, it’s nonetheless untimely to imagine that the reversal will maintain. A significant portion of the FII influx got here from a single giant shopping for session after the India–US commerce deal announcement, reasonably than a gradual movement development. On the foreign money entrance, the greenback index has eased marginally from its latest excessive of 92.19 recorded on twenty eighth January, but it has largely moved in a slender vary over the previous couple of periods, indicating that the weak spot isn’t but decisive. A sustained greenback decline is usually wanted to drive sturdy EM inflows.
Importantly, most key home triggers specifically the India–US commerce deal, Union Price range, RBI coverage determination, and Q3 earnings season are already behind us, but broad-based FII participation has not meaningfully returned. As well as, elevated FII index futures shorts haven’t seen anticipated unwinding.
For markets to construct a stronger uptrend, constant FII money shopping for and visual quick protecting can be two essential triggers, going ahead.
Q: Tech shares have been worst hit this week with Nifty IT index falling greater than 6%. How ought to one commerce on this pack?
The Nifty IT index was among the many worst performers this week, falling over 6%, largely triggered by renewed international considerations round AI-led disruption after Anthropic launched a sophisticated legal-focused AI instrument. This growth intensified fears that AI may more and more change or compress high-value software program and consulting work, a danger not restricted to Indian IT corporations but additionally impacting US know-how and software program corporations. The selloff displays worries about future billing fashions, pricing energy, and demand visibility throughout the worldwide IT providers house.
Technically, the setup has weakened additional. The IT index is buying and selling under its key short- and long-term shifting averages and has confirmed a double-top neckline breakdown, with the measured draw back goal positioned close to the 35,050–35,000 zone. RSI has slipped under 40, indicating bearish momentum, and the MACD line has moved under the zero line. Until the index reclaims and sustains above 36,000, weak spot is more likely to persist. Merchants ought to keep away from aggressive backside fishing and have a look at rallies towards resistance as potential sell-on-rise alternatives till momentum stabilizes.
Q: Defence shares struggled this week regardless of a largely constructive finances for this sector. The place do you see alternatives?
Defence shares underperformed this week regardless of a finances that was broadly supportive for the sector, primarily as a result of worth motion continues to lack momentum. The Defence index has been shifting in a large 8,359–7,459 vary since Price range day and, actually, has remained largely range-bound since September final 12 months with no sustained directional development. The one part of notable outperformance was through the submit–Operation Sindoor rally from early April to late June 2025, after which most beneficial properties have been retraced and momentum light.
Technically, the 8,300–8,400 zone stays a robust resistance band. Solely a decisive breakout above this space with volumes can revive shopping for curiosity on the index degree. Till then, alternatives seem selective reasonably than broad-based. Among the many pack, Knowledge Patterns and MTAR Tech at present show comparatively stronger worth buildings, whereas most different defence names proceed to indicate weak or sideways setups. Merchants could deal with stock-specific energy as an alternative of the whole theme.
Q: Apar Industries, Aarti and Nykaa have been star performers this week whereas BDL, Hindustan Copper and GRSE have been massive losers. What ought to buyers do with them?
Apar Industries, Aarti Industries and Nykaa have proven relative energy this week, but the strategy ought to stay level-based reasonably than chasing momentum. After the post-Price range gap-up, APARINDS has moved in a good vary, with 9,750–9,800 performing as a robust resistance; solely a sustained breakout above this zone can set off contemporary transfer increased. AARTIIND has given a downward-sloping trendline breakout with a rising RSI, and the bullish bias holds so long as it sustains above 420–415 zone. Nykaa has given a volume-backed horizontal trendline breakout, with RSI rising and DI+ crossing DI-, indicating continued upside potential on follow-through.
On the laggard facet, BDL and GRSE stay weak because the defence pack underperforms. Each commerce under key short- and long-term shifting averages. BDL has damaged under the 1,305–1,300 swing low, whereas GRSE failed close to 2,800 and slipped. Pattern reversal is unlikely except these resistance ranges are reclaimed. Hindustan Copper has corrected about 24% after a parabolic rally and is now consolidating in a 658–555 band since final 7 periods. Merchants ought to watch for a decisive vary breakout for contemporary directional alerts.
Q. Which Sectors you’re feeling can outperform from right here on & shares inside them?
From a technical perspective, a number of sectoral indices are exhibiting indicators of relative energy and are poised to outperform within the close to time period. Notably, the Nifty CPSE, Nifty PSE, Nifty Steel, and Nifty Oil & Fuel indices are displaying sustained momentum, beneficial worth buildings, and powerful sector particular tailwinds. These indices proceed to commerce above key shifting averages, and their quick time period indicators level towards continued outperformance so long as present development helps maintain.
Quite the opposite, pockets akin to Nifty IT, Nifty Pharma, and Nifty Healthcare seem comparatively weaker on the charts.
(Disclaimer: The suggestions, strategies, views, and opinions given by the specialists are their very own. These don’t signify the views of The Financial Instances.)
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