The BSE and NSE benchmark indices - the Sensex and Nifty ended the first-half of the calendar year 2026 with notable losses of around 10 per cent and 8.5 per cent despite the latter index registering a new life-time high at 26,373 on January 5, 2026.
Analysts attributed lack of buying interest at record high levels, coupled with geopolitical tensions amid the West Asia war, sharp rise in crude oil prices and a steep fall in Indian rupee as the key factors impacting market sentiment.
Since Covid-19, this is the third time that the Nifty ended the first-half of a calendar year with losses, previously in 2022 and 2020. Interestingly, during the both the years, not only did the NSE benchmark bounce back strongly, but also registered a new life-time high in the second-half of the year, gaining 14.7 per cent and 35.7 per cent, respectively.
Can the markets witness a similar trend in year 2026? Here's what technical analysts at SBI Securities and Choice Equity Broking have to say.
Technical outlook on Nifty for H2CY2026
Equity markets in India have recovered partly amid signs of easing tensions between the US and Iran, and a sharp pullback in
crude oil prices back to around $75 per barrel, says Sudeep Shah, Head – technical & derivatives research at SBI Securities.
The analyst highlights that following the low of 22,182 on April 2; the
Nifty has recovered nearly 10 per cent, and since entered a prolonged phase of sideways consolidation.
Over the past few months, the Nifty has largely traded within a 1,600-point range, with 23,000 emerging as a strong support zone and 24,600 acting as a formidable resistance.
Shah cautions that a sustained breakdown below 23,000 could expose the Nifty to a retest of the 22,200 level, where the previous swing low is placed. However, from a broader technical perspective, the 22,000-21,800 range is expected to provide a strong cushion, he adds.
"This region (22,000-21,800) has historically attracted significant buying interest, having acted as an important demand zone during April 2025 and also throughout the April-June 2024 period. Unless this support zone is decisively breached, the probability of a much deeper correction remains relatively low," explains Shah.
On the upside, the analyst sees immediate hurdle for the Nifty placed at 24,600. A decisive and sustained breakout above this level could pave the way for a fresh leg of the rally, with the Nifty potentially extending its pullback towards its previous all-time high of around 26,350 over the coming months.
Technical Outlook on Sensex for H2CY2026
Aakash Shah, Technical Analyst - Technical Research, at Choice Broking reckons that the
BSE Sensex is currently undergoing a consolidation phase following the recent correction from its record highs.
Technically, the index has displayed resilience by closing above its 10-week exponential moving average (EMA) at 76,338, indicating that buying interest is gradually emerging at lower levels. However, he cautions that the index still continues to trade below the 20-, 50- and 100-week EMAs, suggesting that the medium-term trend is yet to confirm a decisive bullish reversal.
"Despite the ongoing consolidation, the long-term technical structure remains constructive, as the Sensex is comfortably trading above its 200-week EMA, currently placed at 72,767. Historically, this moving average has acted as a strong demand zone during corrective phases, and as long as the index sustains above this level, the broader primary uptrend is expected to remain intact," explains Shah of Choice Broking.
ALSO READ | Sensex in July: 23-year history suggests index can deliver a solid return Going forward, the analyst believes that a sustained move above the cluster of moving averages in the 78,800–79,000 zone will be crucial to confirm the resumption of the medium-term uptrend.
For the second half of CY2026, Shah expects the Sensex to trade within a broad range of 73,000–86,000. The lower end of the range is likely to attract value buying, while the upper end may witness profit booking unless supported by stronger market breadth, sustained institutional inflows and a decisive technical breakout.
In the base case scenario, the Sensex may target 86,000 by the end of December 2026. Shah says that a sustained breakout above the 80,400-resistance zone could accelerate the ongoing recovery and open the door for a move towards 88,000–89,000 in an optimistic scenario.
From a technical perspective, Shah sees immediate support for the Sensex placed around 74,533, and major support positioned at 72,767, coinciding with the 200-week EMA. On the upside, he sees immediate resistance near the 50-week EMA at 78,865.
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