After a predictable sell off post budget, Nifty had staged a dramatic turnaround, with tariff positivity catapulting Nifty much above 26000 at open itself on 3rd of February. On the face of it, even FIIs, whose support was one of the key missing points for sometime now, appeared to have come back, with their actions in both cash as well as derivatives indicating buying. Let us see, how the stocks and sectors have responded to these presumptions.
With all constituents of Nifty Realty index having pushed above their respective 10 day SMA, an uptrend looks to be in place in the sector, but then, the sector has been under the thumb of the bears for months on now, and a reversal has been long time coming. On the other end of the spectrum, none of the IT index constituents is trading above this key short term benchmark, but then, the break down was a strong and single day event that changed course abruptly and sharply. But in general broader market appears to have pushed higher, with the percentage of Nifty 500 constituents pushing above 10 and 50 day SMA standing at 65% and 40% respectively. Indeed a positive sign, but with large room higher before concluding that a strong uptrend is in place in the broad market. This is summarized by Nifty’s performance, which ended with wiping off most of the opening gains of the last week, by Friday. Last week’s push higher for Nifty was led by Financial services and Oil & Gas contributing 27% and 13.9% respectively to Nifty’s upmove. Let us now look at two sectors which appears to be on the cusp of a new move.
Nifty Financial Services: Uptrend Holds, Short-Term Consolidation
The index continues to sustain its medium-term uptrend, though it has slipped into consolidation after repeated failures to clear the 28,800–29,000 resistance zone. Currently trading near 27,800, it remains above rising short-term support, keeping the broader structure intact.
Momentum indicators suggest cooling. RSI is hovering around 50, signaling a slowdown in bullish strength without clear bearish divergence. On the weekly chart, MACD has begun to turn, hinting at a possible short-term pullback. Derivatives positioning remains constructive: nearly half of the basket shows bullish futures setups, while about 60% recorded long additions or short covering on Friday, pointing to expectations of further upside.
Stock-wise, HDFC Bank, ICICI Bank, Kotak Bank, and Bajaj group stocks are likely to support the ongoing pullback. As long as the index holds above 27,000, declines should be seen as corrective. A break below this level could trigger deeper consolidation. Overall outlook stays positive, though cautiously optimistic until a decisive breakout emerges.
Nifty Realty: Recovery Signs Within Broader Range
The Realty index is showing early signs of rebound after strong buying emerged in the 700–720 support band. Prices have recovered to ~825, underscoring demand at lower levels. However, the broader trend remains range-bound with a mild bearish bias, and the current rise looks more like a technical pullback than a confirmed reversal.
Momentum indicators are turning supportive: RSI has crossed above 50, while MACD is curling higher from oversold territory, signaling early bullish momentum. Rising volumes during up-moves add conviction. Derivatives data also supports recovery, with nearly 80% of constituent futures showing long additions or short covering, and week-on-week positioning turning bullish.
On the stock front, heavyweights DLF, Lodha, Godrej Properties, and Oberoi Realty — together making up ~70% of the index weight — have formed Morning Star reversal patterns, which could drive the index toward the 850–880 zone. As long as it stays above 800, declines are corrective. A breakdown below 740 would negate the recovery. Short-term outlook remains cautiously optimistic.
First published in Financial Express
