Nifty Financial Services Index Turn Cautious Post Budget
The Nifty Financial Services Index has entered the post‑Budget phase on a cautious note, seeing profit‑taking after failing to sustain higher levels. The index is trading near 26,850 and has slipped below its short‑term rising trendline, indicating loss of near‑term stength. Momentum indicators echo this cooling bias, with the RSI below 50 and the MACD in negative territory, suggesting upside attempts may struggle.
Historically, post‑Budget periods often see near‑term consolidation before trend clarity emerges, underscoring a range‑bound bias for now.
Stock specifically, ICICI Bank, SBI, Bajaj Finance, Kotak Bank, SBI Life, PFC and REC ltd are looking weak on charts and could lead the index further down.
Overall, the index is expected to remain range‑bound, with stock‑specific action dominating. A clearer directional move will emerge only on a break above 27,600 or a decisive fall below 26,200. Until then, buy‑on‑dips near support may suit investors, while traders should remain cautious on rallies.
Realty Index Could See Short-term Respite But sustainability doubted
The Nifty Realty index remains under selling pressure, extending its corrective phase after failing to hold above key resistance levels. The index is trading near 770, drifting closer to the 740–730 support zone, a key demand area in the past. Momentum remains weak, with the RSI near 30–32, indicating oversold conditions, while the MACD stays firmly negative, offering no reversal signals yet. Historically, Realty tends to soften post‑Budget, with the index declining in the first week in 10 of the last 15 years, supporting a cautious near‑term bias. While one‑month outcomes are mixed, performance typically improves over a three‑month horizon, suggesting scope for recovery once selling pressure eases.
Stock specifically, DLF, Lodha, Godrej Properties, Oberoi Realty, Prestige and Brigade has shown signs of reversal from lows and could add strength to the expected short term bounce in the index. Overall, the index is likely to remain weak in the near term. A decisive break below 742 could open downside towards 690–680, while any bounce is likely to face resistance. A sustained recovery is expected only if the index reclaims the 800–820 zone, which could then pave the way towards 875–900. Until then, the trend stays cautious to bearish, with stock‑specific action dominating.
Nifty Metal: Profit‑Taking After Sharp Rally
The Nifty Metal index has witnessed sharp profit‑taking after failing to sustain above the 11,800–12,000 resistance zone, slipping close to 11,400 following a strong rally. While the broader trend remains constructive, near‑term momentum has weakened. Immediate support lies near 11,200; a breakdown could extend the correction towards 10,900–10,700. On the upside, 11,650–11,800 is likely to cap any recovery.
Momentum indicators point to cooling strength, with the RSI easing towards neutral and the MACD flattening, signalling slowing upside traction. Historically, Metals tend to soften post‑Budget, with the first week and month often seeing mild declines, suggesting a cautious near‑term bias.
Across 2011–25, the index usually softens right after the Budget: the week after closed lower in 10 of 15 years, arguing for a cautious near‑term bias. One‑month outcomes are mixed, highlighting dispersion; however, by three months the balance improves (positive 8/15), with outsized rebounds in stimulus years. Budget‑day direction is a poor guide large swings occur both ways—while Budget‑day volumes are consistently far below the prior session, signalling pre‑positioning. Expect consolidation with downside risk this week; reassess after early follow‑through—an early bounce can tilt probabilities toward a firmer 1–3 month path.
On the stock specific front, Adani Enterprises, JSW Steel, Tata steel, Hindustan zinc, Vedanta, Hindalco and Lloyds metals & energy have shown signs of exhaustion at higher levels and could continue to attract profit booking which could drag the index in the near term.
Overall, the index is likely to consolidate or correct modestly in the short term. While the medium‑term outlook remains positive, fresh upside is likely only on a decisive move above resistance; otherwise, dip‑buying near supports may offer better entry opportunities.
Nifty Auto Enters Corrective Phase
The Nifty Auto index has entered a near‑term corrective phase after failing to sustain above recent highs and slipping below its short‑term rising trendline. The index is trading near 26,270, signaling loss of momentum after a strong rally. Momentum indicators confirm the slowdown, with the RSI below 50 and the MACD turning lower, pointing to short‑term pressure.
Historically, post‑Budget trends seen notably in sectors like Auto suggest near‑term caution, even as one‑ to three‑month outcomes often improve, indicating scope for consolidation rather than a sharp reversal.
On the stock‑specific front, M&M, Maruti, and Tata Motors appear weaker on the charts, while Bajaj Auto, Eicher Motors, TVS Motor, Bosch Ltd, Motherson, and Hero MotoCorp look to be gearing up for a reversal. Overall, the sector is likely to remain a mixed bag.
Overall, Nifty Auto is likely to remain range‑bound to mildly weak in the near term, with stock‑specific action dominating. A meaningful upside towards 28,000+ would require a decisive breakout above 27,200–27,500, while key supports lie at 26,000–25,900. Traders may stay cautious, while positional investors can consider accumulating on dips near support.
Nifty Pharma Trades Sideways Near Key Support
The Nifty Pharma index is trading range‑bound near 21,575, failing to hold higher levels and showing signs of consolidation after its earlier rally. Immediate support lies at 21,400–21,300; a decisive break below could drag the index towards 20,800–20,500. On the upside, 22,000–22,200 remains a key resistance zone, with a breakout needed to revive bullish momentum towards 22,800–23,000.
Momentum remains subdued, with the RSI hovering in the 40–45 zone and MACD flat near the zero line, indicating lack of a clear trend. Historically, Nifty Pharma has declined in 11 of the last 15 post‑Budget weeks, suggesting a cautious to mildly negative bias in the near term. While one‑month returns skew negative, instances of a positive first week have often led to a firmer monthly performance. Base case: consolidation with mild downside. A decisive positive week would raise odds of a firmer month; another weak week keeps –2% to –6% risk for February.
Stock specifically, Sunpharma, Cipla, Zyduslife, Divis lab, Auropharma and Biocon showing signs of reversal and could add to positivity in the near term.
Overall, the index is likely to remain range‑bound, with stock‑specific action prevailing. A clear directional move will emerge only on a break above resistance or below key supports.
Nifty IT Consolidates Below Key Resistance
The Nifty IT index is consolidating near 38,250, unable to sustain above recent rebound highs after the sharp correction from the 2024 peak near 45,000. The prolonged sideways movement suggests a pause rather than a trend reversal. Immediate support is placed at 37,500–37,300; a decisive break could open downside towards 35,800–35,500. On the upside, 39,500–40,000 remains a strong resistance zone, and only a sustained breakout above this band would revive bullish momentum towards 42,000–43,500. Historically, the week after the Budget tends to be weak (down in 12 of the last 15 years), keeping the near‑term bias cautious. However, one to three month performance improves, indicating scope for recovery if early follow‑through turns positive. Momentum indicators signal stabilisation, with the RSI in the mid‑50s and MACD flat near zero, pointing to a lack of strong directional bias. Overall, the index is likely to remain range‑bound, with dip‑buying near support and resistance‑led selling until a decisive breakout above 40,000 emerges.
Nifty FMCG Faces Resistance, Trend Turns Cautious
The Nifty FMCG index is trading near 50,000, extending its corrective phase after failing to sustain above the 55,000–56,000 zone. The index has slipped below short‑term supports, indicating a weakening price structure after the strong multi‑year uptrend seen between 2020 and 2024. Immediate support is placed at 49,000–48,800; a decisive break could drag the index towards 47,000–45,500. On the upside, 51,500–52,000 remains a key resistance band, with a heavier supply zone near 54,000. Momentum remains weak, with the RSI in the low‑40s and the MACD below the zero line, suggesting the absence of reversal signals. From a stock specific view, ITC, Nestle Industries, VBL, Britannia, Godrej consumer products, Tata Consumer and Dabur look weak on charts and could drag the index in the near term. Historically, FMCG shows a mildly negative bias in the week after the Budget, while one‑month performance often improves, though gains tend to fade over a three‑month horizon. Overall, the index is likely to remain range‑bound to weak in the near term. A sustained recovery is expected only above 52,000; until then, rallies may face selling pressure, with stock‑specific action dominating.
Nifty Energy: Consolidation After Sharp Correction
The Nifty Energy index is trading near 34,050, consolidating after a sharp correction from the 2024 peak of 43,000–44,000. The sideways movement suggests indecision at current levels following a deep retracement of the prior up‑move. Immediate support lies at 33,500–33,000; a decisive break could extend the correction towards 31,500–30,500. On the upside, 35,500–36,000 is the first resistance zone, followed by a stronger hurdle near 38,000–38,500. Momentum indicators point to stabilisation but no reversal, with the RSI in the mid‑40s and the MACD still below zero, though selling pressure is easing.
Historically, Nifty Energy has shown near‑term weakness post‑Budget, with the first week declining in 9 of 15 years. One‑month post outcomes improve, but three‑month performance often weakens, indicating that post‑event bounces lack durability. Overall, the index is likely to remain range‑bound with a cautious bias. A clear directional move is expected only on a decisive breakout above resistance or a breakdown below key supports, while stock‑specific action continues to dominate.
Nifty PSU Bank: Profit‑Taking After Rally, Trend Still Constructive
The Nifty PSU Bank index is trading near 8,520, seeing profit‑taking after a strong rally and easing from the 8,900–9,000 resistance zone. Importantly, the index continues to trade above its rising trendline, keeping the broader structure constructive despite cooling near‑term momentum. Immediate support lies at 8,350–8,200; a decisive break could deepen the correction towards 7,900–7,700. On the upside, a sustained move above 9,000 is required to resume the uptrend towards 9,300–9,500. Momentum indicators suggest consolidation rather than reversal, with the RSI in the low‑40s and the MACD flattening after its recent decline. Historically, PSU Banks tend to soften in the first week post‑Budget, though one‑month outcomes often improve, while three‑month performance remains volatile, underscoring macro sensitivity. Overall, the index is likely to remain range‑bound with a cautious near‑term bias. Traders may stay light on rallies, while positional investors can consider buy‑on‑dips near support as long as key levels hold.
First published in Financial Express