Down 2.5% in February to date, will Nifty 50 stay in crimson for fifth month? Technical consultants recommend key ranges to look at

The Indian inventory market noticed a quick respite on Monday after eight consecutive classes of losses. Nevertheless, the rally was short-lived as frontline indices got here underneath recent promoting strain on Tuesday. The market stays underneath stress resulting from weak company earnings, financial uncertainty, sustained promoting by international institutional buyers (FIIs), excessive valuations forward of the brand new monetary yr, and world macroeconomic considerations.

Simply immediately, Sensex misplaced 466 factors to hit the day’s low of 75,531.01 whereas the broader Nifty declined 157 factors to its intra-day low of twenty-two,802.40.

Key Components Driving the Market Downturn

One of many main causes for the continued downturn available in the market is the escalating world commerce tensions stemming from former US President Donald Trump’s tariff insurance policies. His technique, which initially focused international locations akin to Mexico, Canada, and China, has now expanded to incorporate import tariffs on metal and aluminium throughout all nations. The European Union’s counter-tariffs have additional fueled considerations over a possible commerce conflict, dampening investor sentiment.

Moreover, US banks transporting gold from London to New York has created additional unease in world monetary markets. The US Federal Reserve’s choice to keep up rates of interest with none indication of future charge cuts, aggressive FII outflows, weak company earnings, a depreciating Indian rupee, and stretched valuations have all contributed to the prevailing market weak point.

“The market assemble doesn’t favor a rally at this stage. FIIs are prone to proceed promoting, and information flows stay destructive. The US market continues to be sturdy and should appeal to extra capital away from India. Moreover, current developments in China recommend potential coverage shifts that would drive FIIs in the direction of Chinese language equities resulting from comparatively decrease valuations,” mentioned V Ok Vijayakumar, Chief Funding Strategist at Geojit Monetary Providers.

Market Efficiency in Current Months

The Nifty 50 has declined 2.5 per cent to date in February, marking its fifth consecutive month of losses. The index shed 0.6 per cent in January, 2 per cent in December, 0.3 per cent in November, and 6.2 per cent in October.

In February 2025, the markets have closed in optimistic territory on solely two of the 13 buying and selling classes to date, leading to a year-to-date decline of over 3 per cent. The persistent bearish sentiment raises questions on whether or not the correction will proceed for the rest of the month or if a rebound is on the horizon.

Technical Outlook and Key Ranges to Watch

The Nifty 50 has been on a downward trajectory for the previous 5 months, struggling to regain momentum since hitting its all-time excessive of 26,277.35 in September 2024. Nevertheless, technical indicators such because the double-bottom sample and optimistic RSI divergence recommend the potential for a short-term pullback. 

Om Mehra, Technical Analyst at SAMCO Securities identified that with Nifty’s January month-to-month shut at 23,508.40, it wants to realize practically 550 factors within the remaining eight buying and selling classes to keep away from a fifth straight destructive month-to-month shut.

Regardless of persevering with its lower-high, lower-low formation and buying and selling beneath key shifting averages, the current double-bottom sample and optimistic divergence within the each day RSI recommend the opportunity of a robust pullback, Mehra mentioned. 

“Furthermore, Nifty has persistently held above the 22,800 mark, indicating resilience and consolidation inside this vary. A aid rally is anticipated, with a detailed above 23,240, probably, opening the door for a transfer towards 23,400,” he added.

Mehta sees resistance at 23,500, including {that a} breakout above this stage might prolong the rally towards 23,570. On the draw back, key assist ranges are at 22,700 and 22,650, he mentioned. Nevertheless, merchants are suggested to undertake a cautious method as intermittent pullbacks are anticipated, and a one-sided rally seems unlikely within the close to time period.

Trivesh D, COO at Tradejini additionally acknowledged that the Nifty 50 is at the moment positioned at a vital assist stage of twenty-two,700. 

“The market stays in a wait-and-watch section, with a possible restoration solely possible if there’s a notable enchancment in market liquidity. If the 22,700 assist stage holds, the market might witness a aid rally. Nevertheless, a breach beneath this stage might set off additional declines. On the upside, key resistance is noticed close to the 23,300 mark, which might be a big stage to look at for any potential bullish momentum,” Trivesh D added.

Disclaimer: The views and proposals made above are these of particular person analysts or broking firms, and never of Mint. We advise buyers to test with licensed consultants earlier than taking any funding choices.