Sensex sheds 3,000 pts in 9 days, Nifty tests 25,500; what next for market?

Despite the sharp volatility, the Nifty is seen holding above the 20-DMA and 200-DMA on the technical charts; analysts see 25,500 as the key support for now.

Equity benchmark indices have witnessed a roller-coaster ride thus far in the month of February amid a slew of major developments, including the much-awaited India-US trade deal, the Union Budget 2026 and corporate earnings.  Amid this, the Sensex and the Nifty slumped to a low of 79,899 and 24,572 on the Budget day (February 1), and snapped back sharply two days later (February 3) to a high of 85,872 and 26,341 following the India-US trade agreement.  The roller-coaster ride did not stop here, over the next nine trading sessions, the Sensex has once again plunged over 3,000 points from the recent high to a low of 82,793 hit today (Friday, February 13) dragged by intense selling pressure in IT shares. Similarly, the Nifty had dropped back to 25,500-odd levels - down over 800 points of 3.2 per cent from the recent high.  Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments reckons that the massive sell-off in IT stocks is rattling the Indian stock market, and advises investors to exercise patience.  "What is rattling the Indian market now is the massive sell-off in IT stocks, which is the second largest profit pool of India Inc. The real impact of the 'Anthropic shock' on the IT sector is yet to be ascertained. Panic selling in IT stocks at this stage may not be a good idea. Investors may wait and watch for the dust to settle," says Vijayakumar.  Vijay Bhambwani, founder-promoter of Bhambwani Securities believes that the current market sell-off is on account of unwinding of leverage trades by retail investors. The analysts explained that retail investors had built notable positions in the cash market via the margin funding route and the F&O segment, which are now getting hit as share prices continue to fall.  ALSO READ | Sensex falls 900 pts, Nifty below 25,600: Why are markets falling today?  On Friday, as of 10:30 AM, the Sensex had plunged 0.9 per cent or 750 points to 82,918, and the Nifty was down 1 per cent or 243 points at 25,565.  Meanwhile, the technical chart shows that despite the recent fall, the Nifty 50 index is seen holding above the short-term - 20-day moving average (20-DMA) and the 200-DMA, which stands at 25,471 and 25,293, respectively. 

 

  Technical analysts reckon that the 25,000-mark on the Nifty is a key support level, with the index seen broadly trading in the band of 25,500 - 26,000.  "The Nifty is now hovering within a broader range of 25,500 support and 26,000 resistance. A decisive close above the retracement ceiling is required to establish direction. Until then, the index is likely to remain range-bound, with rallies encountering pressure near the Fibonacci band," says Om Mehra, technical research analyst at SAMCO Securities.  Referring to an uptick in India VIX, the analyst expects volatility to continue within this broad range, and does not rule out the possibility of two-sided movement rather than directional expansion.  Whereas, Hitesh Tailor, technical research analyst at Choice Broking sees the 25,300 – 25,500 zone as a critical support band for the Nifty, closely aligned with key moving averages and recent swing lows.  The analyst believes that as long as the Nifty sustains above this zone on a closing basis, the medium-term trend structure remains intact and constructive.  On the upside, Tailor sees 25,800 – 26,000 as a formidable resistance cluster. This zone has repeatedly witnessed supply emergence and profit booking, restricting upward momentum, he adds.    Meanwhile, the Sensex seems to have hit an identical top in the month of January and February around 85,870 levels.  As per the monthly Fibonacci chart, the index may swing in the broad range of 80,000 - 85,200 this month. Technical chart shows that the 20-DMA and the 200-DMA for the Sensex stand at 82,850 and 82,700 levels.  At current levels, the Sensex is seen quoting below the 100-DMA and 50-DMA, which stand at 84,045 and 83,780 levels.  From a broader technical perspective, Hitesh Tailor sees 82,000-82,400 on the Senex as a crucial support zone, which aligns closely with the 200-Day EMA. Tailor reckons that as long as the Sensex sustains above this level, the medium-term trend remains intact.  "On the upside, 84,000–84,500 is acting as a strong resistance band. This zone has repeatedly witnessed supply and profit-booking pressure, and a sustained move above it is required to regain bullish momentum," says the analyst from Choice Broking.    Disclaimer: The views expressed by the brokerage/ analyst in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.