Last week, we pointed out that the challenge facing the bulls was to cross and close above the initial resistance band of 25,562–25,606 and the major resistance zone resting at the 25,900–26,010 levels. On the downside, the crucial support to be maintained was at the 25,356 level. On the first day of last week, the index closed at 25,682, recovering from a low of 25,372. Over the next two days, it reached the week’s high of 25,885. However, without even attempting to breach the 25,900 resistance zone, it retreated to 25,380 before closing the week at 25,571. You could say that the Nifty is currently dancing to the tunes of the put writers at the 25,400 level and the call writers at the 26,000 level.
Among the sectors, we discussed the movements of the Bank Nifty, IT, Infra, and Metal indices in detail last week. Of these, Bank Nifty passed the test. Metal and Infra indices remained flat, while the IT index deteriorated slightly further. While the Metal index dipped in the initial days and recovered towards the end of the week, the IT index moved in the exact opposite direction—surging early in the week and sliding towards the end. Let’s look at what to expect in the coming days.
There are currently more than enough factors to rattle the market, including the tariff changes following the US Supreme Court ruling, Iran looming under the shadow of war, and this month’s futures settlement concluding on Tuesday. The first support to watch in the coming days is at 25,410. To overcome the current critical phase, the bare minimum required from the bulls is to defend this support, break and close above the initial resistance zone of 25,750–25,885, and subsequently cross and close above the final supply zone of 25,900–26,010. This marks the third consecutive week that the Nifty has closed below the 25,693 mark. However, they managed to hold the strategically important support of 25,507. In short, even when fatigued, the bulls are making sure they don’t lose their footing. The key sectors standing by the bulls right now are Banking, Commodities, Energy, Infrastructure, Media, Metals, and Public Sector Enterprises.
The most important event of this week is the release of the third quarter (Q3 FY26) GDP data for the current financial year by the Ministry of Statistics and Programme Implementation (MoSPI) on Friday (February 27). The most notable aspect of this release is the introduction of the new base year (2022-23) for GDP calculations. Therefore, the market will closely monitor these new figures to accurately assess the true economic growth and consumption trends following the recent Union Budget. In addition, data on the Infrastructure/Core Sector Output, based on eight core industries, will also be released on the same day. This data is highly crucial for understanding the ground reality of the manufacturing and capital goods sectors, which heavily influence the market’s medium-to-high risk growth potential.
The rise in crude oil prices is a factor that will significantly impact the Indian economy and the market. The Central and State governments collectively earn over ₹7 lakh crore annually through various taxes on petroleum products. If consumption drops due to price hikes, or if tax cuts have to be rolled out to ease the burden, this revenue will decline, directly and adversely affecting the governments’ developmental activities and spending capacity. Looking at the technical side, crude oil, which closed at 6,057 last week, has its immediate resistance level at 6,188. If it crosses this mark, it will open up possibilities for a rally toward higher targets of 6,300, 7,235, and 7,857. Under the current circumstances, the downside support is at 5,534. It remains to be seen whether slipping on oil prices will cause the stock market bulls to lose their balance.