Global sell-off signals weak start, but Nifty is ‘oversold’

Mumbai: Indian stocks could open weak on Wednesday, tracking the sell-off in other Asian markets on Tuesday, with the US-Israeli attacks on Iran extending to the fourth straight day. Domestic financial markets were shut on Tuesday for Holi. With the Nifty breaching key technical supports on Monday, the near-term trend is flashing weakness. Analysts have flagged crucial support zones between 24,600 and 24,300 for near-term trading.

Dharmesh Shah, Head – Technical Research, ICICI Securities

With the Nifty falling below the psychological mark of 25,000, a strong support is placed in the 24,400-24,300 zone, which is a confluence of the 20-month exponential moving average (EMA)-held since the post-Covid lows-and the 80% retracement of the May-25 to Jan-26 rally (23,935-26,373). Meanwhile, on the upside, 25,200 would act as immediate resistance.

In the last four decades, there have been six major geopolitical escalations. On each occasion, a major bottom was formed once anxiety around the event settled down. Investing in such panic reactions with a long-term mindset has been rewarding. In the current scenario, post the knee-jerk reaction, we believe the market would stabilise.

We advise that dips should be capitalised on to build quality portfolios from a medium- to long-term perspective. Pullback options would remain open as long as Nifty holds the key support threshold of 24,100.

Ruchit Jain, Vice-President, Motilal Oswal Financial Services
The Nifty had already breached its 200-day EMA support of 25,240 at the end of last week, and negative global news flows led to a breach of the psychological support of 25,000 as well. The breach of supports one after another indicates a near term downtrend for our markets. The immediate supports for Nifty are placed at 24570 and 24330 which is August 2025 swing low.
The near-term trend remains negative, but the global news flows are likely to dominate the short-term trend for the equity markets. Global geopolitical tensions, rising Crude prices, FII selling and depreciating Rupee are all negative factors for equity markets. Thus, markets are likely to trade with higher volatility. Until the index holds below 25,000-25,100, weakness could be seen towards the 24,400-24,350 zones, while hurdles have shifted to 25,100 and then 25,250. Amol Athawale, VP – Technical Research, Kotak Securities
Currently, the market is trading significantly below both short-term and medium-term averages, and on daily charts, it appears to be in a weak formation, indicating a largely negative outlook.

We are of the view that for positional traders, 24,600 would act as a crucial support zone. If the market slips below this level, the correction could continue until 24,300. Further downside may also persist, potentially dragging the index to 24,000.

On the flip side, 25,000 remains the crucial resistance zone for the bulls. The current market texture is extremely volatile, and is expected to remain volatile in the near future.