Nifty August range second-narrowest in 3 years; here's what history shows

On average, Nifty's monthly trading band expanded to nearly 6%, and up to 12% in the following four months after a range contraction, according to NSE's 3-year monthly data.

The NSE Nifty 50 index moved in a tight 3.25 per cent range in August as the market undertone remained subdued owing to high crude oil prices. The Nifty touched a high of 24,774 on the first trading day of the month and a low of 23,994 in the last trading session - down 784 points from the month's high. The index eventually ended August with a loss of 1.2 per cent or 304 points at 24,080. In per centage terms, Nifty's trading range in August 2026—the difference between the month's high and low—is the lowest since December 2025 and the second-narrowest since August 2023, according to Nifty monthly data. 

 

 

 An analysis of the NSE data shows, that the Nifty moved in a 2.4 per cent or 633-point range in December 2025; and in a 2.97 per cent or 572 points in August 2023. Interestingly, the Nifty trading band expanded to nearly 6 per cent on both the past occasions over the next four months. In the January-to-April 2026 the average monthly band expanded to 8.5 per cent, with a high of 12.1 per cent in March 2026. Similarly, in the year 2023, the trading range widened to an average 5.9 per cent in the 4-month period - September-to-December 2023, with a highest range of 7.4 per cent in the last month of that year. Further, analysis of the data in above mentioned 4-month period shows, that the Nifty shed 8.1 per cent in 2026, and surged as much as 12.9 per cent in 2023. Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities says that a forward-looking analysis of one-month and three-month returns following these 12 instances shows that while one-month returns were mixed, the three-month performance was generally positive. There were only three instances when both one-month and three-month returns were negative after the Nifty traded in such a tight monthly range. "Following January 2020, the Nifty declined nearly 7 per cent in the subsequent month and around 18 per cent over three months, primarily due to the onset of the Covid-19 pandemic. After December 2025, the index fell around 3 per cent in one month and 14.5 per cent over three months, amid the US-Iran war," explains Shah. Broadly, Shah says the Nifty largely delivered positive returns over the subsequent three months, with the average positive gain standing at around 7.3 per cent. "This suggests that periods of unusually low volatility and tight consolidation have historically been followed by a meaningful expansion in the index’s trading range, with the eventual direction more often skewed towards the upside," says Shah. Check - TOP GAINERS NSE | TOP LOSERS NSE 

What lies ahead for Nifty in the next four months?

Meanwhile, G Chokkalingam, founder and chief executive, Equinomics Research reckons that the Nifty may exhibit volatility with a downward bias in the near-term. He sees high crude oil and a booming primary market as the key hindrances for the market current. "For the market to go up, oil prices need to fall from $90 levels, and or the IPO boom needs to fade," says Chokkalingam. Foreign investors may ramp-up buying in Indian stocks, only if oil prices fall considerably. Secondly, a lot of domestic liquidity is getting sucked into the primary market, owing to the surge in IPOs. The primary market needs to take a backseat for flows to return back to the secondary market, explains the analyst. Chokkalingam cautions that in case oil prices rise further to $100-110 range, and IPO boom continues, the Nifty could fall up to 5 per cent from current levels owing to lack of liquidity. From a technical perspective, Shah sees immediate support for the Nifty in the 24,030–24,000 zone, which coincides with the rising trendline support drawn by connecting the lows of 22,183 and 23,072 recorded on April 2 and June 11, respectively. On the upside, the analyst sees the 24,770–24,800 zone as the immediate resistance zone, coinciding with the previous swing-high area. A sustained move above this zone would signal a fresh breakout and could pave the way for the Nifty to extend its pullback towards 25,500 over the medium term, says Shah. Disclaimer: Views and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers' discretion is advised.