Last week, it was indicated that the immediate support to watch was 26,211. It was noted that if this level were breached, the 25,969–25,726 support zone would become crucial. Conversely, if 26,211 held and the index managed to close above 26,455, the rally could have extended towards the 26,502–26,987 levels. Although Nifty had closed at an all-time high the week prior, the new high of 26,373 recorded at the start of last week remained the weekly high. On that day, the index tested a low of 26,210 but managed to close at 26,250. The picture became clearer the following day when it closed at 26,178. Subsequently, 25,969 gave way, and by Friday, the 25,726 level was also surrendered, with Nifty finally closing at 25,683.
The primary trigger for the current anxiety stems from the US intercepting a Russian oil tanker following military actions in Venezuela. This fear has escalated with moves to impose a 500% additional tariff on countries purchasing oil from Russia. The burning question in many minds is whether this marks the beginning of a market crash. A look at stock market history reveals a clear fact: major market crashes have never begun in an atmosphere of fear; they have always originated from excessive greed.
There is a famous quote by Sir John Templeton: “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.” It is important to understand that the real probability of a crash begins when there is absolutely no anxiety about the market. Fear is not the cause of a market crash; rather, it is often a consequence of it. Investors should shift their focus away from stocks soaring solely on speculation and concentrate on companies with strong fundamentals. Care should also be taken to stay detached from market noise. Market corrections are a natural process. Let us examine Nifty’s potential moves in the coming days.
In the coming days, the first support level to watch for Nifty is 25,530. If this level is breached on a closing basis, the next major support levels lie at 25,318 and 25,170. At present, this represents a very strong support zone. Only if this zone is also surrendered will any significant opportunities open up for the bears.
Now, let us look at the levels to watch on the upside. For the market to recover, the 25,880 level is critical. If Nifty manages to close above 25,880 in the coming days, the current correction can be considered over. In such a scenario, the market is likely to bounce back and advance towards the next resistance levels of 26,210 – 26,373.