NIFTY Index Chart Analysis

The Nifty 50 logged a fresh all-time high on January 2, breaking out of a one-month triangular pattern. However, follow-through buying was absent after U.S. President Donald Trump warned of higher tariffs on India over Russian oil, while geopolitical tensions rose following a U.S. strike on Venezuela. As a result, on the daily chart, the index formed a Dark Cloud Cover candlestick pattern, followed by a doji-like candle. Importantly, prices have managed to hold above the low of the January 2 breakout candle. [EasyDNNnews:PaidContentStart]

Nifty’s technical setup remains bullish, as it continues to trade above all key moving averages (20, 50, 100 and 200-DMA). 

That said, momentum has moderated, signalling some fatigue unless fresh triggers emerge. The immediate catalysts to watch are Q3FY26 earnings and developments on the U.S.–India trade deal front. The lack of a conclusive outcome on the trade deal has kept a lid on momentum, acting as a headwind for the bulls. One area of concern remains market breadth, which still needs to widen meaningfully for a sustained-up move. 

On supports, the first line of Defence is around 26,024, where the 20-DMA currently stands. A failure to hold above this level could invite mild profitbooking towards 25,700, where a major support is placed. The 25,700 zone is important due to a confluence of factors: it marks the lower band of the ongoing consolidation range, and the lower Bollinger Band is also positioned around this level. As long as the index stays above 25,700, declines may offer incremental buying opportunities. On the upside, we maintain a constructive stance; a decisive close above 26,300 would open the door towards the 26,800 zone in the coming weeks, supported by sector rotation and improving risk appetite. 

In the broader market, the Nifty Midcap 100 and Smallcap 100 indices present an interesting setup. The Nifty Midcap 100 has broken out of an ascending triangle pattern and has been consolidating above the breakout for the last couple of sessions. Meanwhile, the Smallcap 100 is on the verge of breaking out of an almost one-and-a-half-month consolidation. From a chart perspective, broader indices are also well placed; what is needed now is a credible trigger that can revive momentum and help market breadth expand meaningfully for a healthier up move. 

Over the coming fortnight, earnings will be the key trigger, and for the Nifty 50, 25,700 remains a sacrosanct support. For momentum to build, the index needs to sustain above 26,300 on a closing basis; until then, the 25,700–26,300 range is likely to remain in play. A stock-specific approach, with a focus on sectors showing relative strength, is recommended. Caution and disciplined risk management remain crucial over the next fortnight.

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