F&O Discuss | Nifty grapples with lifeless cat bounce syndrome as pullbacks get offered. Sudeep Shah on Olectra, IDBI, 4 extra shares
International cues stay destructive with the Iran-Israel struggle getting into the fourth week. The vitality costs stay elevated with Brent hovering close to the $113 a barrel mark. For home markets, persistent FII outflows and rupee weak point stay a rising concern.
Worry index India settled at 22.81 on the NSE within the final session, mildly up by 0.04%.
Analyst Sudeep ShahVice President and Head of Technical & Derivatives Analysis at SBI Securitiesinteracted with ETMarkets relating to the outlook for the Nifty and Financial institution Nifty, in addition to an index technique for the upcoming week. The next are the edited excerpts from his chat:
Q: Nifty ended mildly destructive at 0.2% WoW, narrowing its losses via Friday beneficial properties because the bull began emphatically however misplaced momentum in the direction of the tip. Was it brief masking or do you see the development persevering with subsequent week as nicely?
Markets have little tolerance for uncertainty—and the continuing escalation in West Asia since February 28 has stored danger urge for food firmly in verify. For the reason that onset of the battle, the Nifty has corrected sharply by over 2000 factors, reflecting the sustained strain from international cues and risk-off sentiment.
The value motion throughout this part has been telling. The index has witnessed three distinct lifeless cat bounces, every met with aggressive promoting at larger ranges—clearly underscoring the agency grip of bears available on the market. Each pullback has been offered into, highlighting an absence of conviction amongst consumers. Whereas Nifty managed to finish the present week on a flat word, the underlying weak point continues to persist.
Volatility remained elevated all through the week. The index staged a pointy restoration of practically 900 factors within the first three buying and selling periods, solely to see all beneficial properties utterly erased on Thursday-marking the sharpest single-day decline since June 4, 2024. Finally, Nifty ended the week on a muted word, extending its shedding streak to 4 consecutive weeks.
Sectorally, the ache has been most seen in Vehicle and Banking shares, which have been the important thing outperformers previous to the battle. These sectors have borne the brunt of promoting strain, largely pushed by sustained FII outflows, with international buyers offloading an enormous ₹81262 crore within the ongoing March collection. Given their heavy publicity to those sectors, FII promoting has amplified the draw back momentum.
A serious overhang for the markets has been the sharp surge in crude oil costs. Brent crude as soon as once more spiked to $114.3 per barrel through the week earlier than witnessing a marginal cooling off. Concurrently, considerations round gasoline shortages and provide disruptions have intensified, with key vitality commodities witnessing steep value will increase because the begin of the battle. Elevated vitality costs proceed to pose a danger to inflation dynamics and company margins, thereby weighing on fairness markets.
From a technical standpoint, the development stays decisively destructive. The index is at present buying and selling beneath its all of the essential shifting averages, and the formation of a bearish candlestick with an extended higher shadow signifies persistent promoting strain at larger ranges. Including to the warning, the weekly RSI has slipped to 30.22, marking its lowest degree because the COVID-led market correction—signalling deeply oversold situations, but with no clear reversal set off.
Q: What ranges will likely be necessary for Nifty this week and the way ought to one commerce?
For Nifty, the 22,850–22,800 zone will act as speedy assist. A sustained breach beneath this degree might speed up the decline in the direction of 22,500. On the upside, the 23,420–23,460 zone is more likely to act as a stiff resistance, with any pullback anticipated to face promoting strain on this band.
Q: Market’s lackluster efficiency will be attributed to Nifty Financial institution, which has delivered its third worst efficiency in March up to now 20 years, declining by practically 11%. What do Financial institution Nifty charts counsel and the way to commerce?
For the fourth consecutive week, the banking benchmark index Financial institution Nifty ended on a destructive word, underscoring sustained weak point and protracted promoting strain within the banking area. Most notably, on the weekly chart, the index has shaped a small-bodied candle with an extended higher shadow, which clearly displays promoting strain rising at larger ranges and a failure to maintain intraday and weekly recoveries.
Moreover, for the second straight week, Financial institution Nifty has closed beneath its 100-week EMA, which is an important long-term development indicator and reinforces the bearish undertone. On the every day timeframe, the index continues to stay beneath strain, because it has been buying and selling persistently beneath its 200-day EMA for the previous ten buying and selling periods. This extended keep beneath the long-term shifting common highlights a lack of medium-term development energy and signifies that rallies are being offered into.
Momentum indicators additionally stay firmly biased in the direction of the draw back. Each the every day and weekly RSI are positioned in bearish territory and are sloping downward, suggesting weakening momentum and restricted scope for any significant upside within the close to time period.
Going ahead, the zone of 54,300–54,400 is anticipated to behave as a key resistance space for the index. So long as Financial institution Nifty trades beneath the 54400 mark, the broader outlook is more likely to stay destructive. In such a state of affairs, the index might proceed its downward trajectory and check the speedy assist close to 52,200, adopted by the subsequent necessary assist round 51500 within the
Q: Auto sector is one other prime loser and its prospects are tied to grease costs and inflation. In mild of the Iran-Israel struggle, do you count on extra correction, or is a backside seen?
Nifty Auto staged a robust rebound in keeping with the broader market, bouncing from the 24,230–23,850 zone, a area that had beforehand acted as sturdy resistance throughout June–August 2025. Nevertheless, the pullback proved short-lived because the index encountered stiff resistance close to the 25,700–25,750 zone and finally closed decrease.
Notably, after going through rejection across the 28,720–28,820 zone between February 11–26, 2026, the index has corrected practically 14%, confirming a double-top neckline breakdown within the course of.
Technically, the index continues to commerce beneath its key brief and long-term shifting averages, indicating a weak underlying development. Momentum indicators additionally stay bearish. The RSI has didn’t maintain above the 40 mark regardless of a number of makes an attempt, whereas the MACD stays beneath each the zero line and the sign line. Moreover, a rising ADX suggests strengthening bearish momentum.
Going forward, the 25,200–25,300 zone is more likely to act as a vital resistance. So long as the index stays beneath this degree, the broader development is anticipated to remain destructive. On the draw back, the 24,200–24,100 zone serves as a key assist, and a decisive breach beneath this vary might set off additional draw back within the index
Q: Fed has left coverage charges unchanged and has indicated a single fee lower of 25 bps this yr. This comes as a blow to the tech sector which is already reeling beneath the AI risk. What’s your tackle the sector and any most well-liked inventory to purchase?
Since peaking at 40,301 on third February, the Nifty IT Index has corrected sharply by practically 28%, reflecting a mix of worldwide macro headwinds and a deeper structural concern round AI disruption.
Whereas a stronger greenback sometimes acts as a tailwind for IT corporations on account of larger export realizations, this time the profit has been overshadowed. The core problem lies within the rising notion that AI poses a elementary risk to conventional IT companies, particularly in areas like low-end coding, upkeep, and repetitive back-office features. Markets have been fast to cost on this danger, resulting in sustained promoting strain.
That mentioned, it’s necessary to notice that main IT corporations should not standing nonetheless. Corporations like Tata Consultancy ServicesInfosys, and HCLTech have been actively investing in AI capabilities, constructing proprietary platforms, and integrating AI-led options into their service choices. Nevertheless, this transition is gradual in nature, the advantages are unlikely to replicate instantly in earnings and should take just a few quarters to materialize meaningfully.
From a technical standpoint, the setup stays weak. The index continues to commerce beneath its key short- and long-term shifting averages, indicating a sustained downtrend. The MACD line stays nicely beneath each the sign line and the zero line, reinforcing bearish momentum. Though the tempo of decline has moderated not too long ago, there are nonetheless no clear indicators of base formation or development reversal.
Given this backdrop, it could be prudent to keep away from backside fishing at this stage. A extra wise strategy could be to attend for indicators of stabilization, comparable to sustained value energy, bettering momentum indicators, or proof of earnings resilience pushed by AI adoption, earlier than contemplating contemporary publicity to the sector.
Q: India VIX is up 68% in a month and volatility is anticipated to stay excessive going forward. How ought to one navigate this part?
With India VIX surging 68% in a month, buyers ought to prioritize capital safety. Give attention to disciplined place sizing, keep away from aggressive leverage, and follow high-quality shares. Use rallies to scale back danger, preserve larger money ranges, and look forward to volatility to chill earlier than taking directional bets.
Q: Olectra, JBM Auto and Jai Prakash Energy Ventures have been large gainers this week, whereas Chennai IDBI Financial institution, Bandhan Financial institution and BPCL have been large losers. What ought to buyers do with them?
Olectra Greentech
The inventory has witnessed a robust rebound from the lows of 865. Nevertheless, it stays in a broader downtrend since October 2025, and it’s nonetheless untimely to categorise the present transfer as a development reversal. For any significant upside traction, the inventory must maintain above the 980–975 zone.
JBM Auto
The inventory rebounded sharply from its key assist zone of 490–470 earlier this week. That mentioned, it continues to face resistance close to its earlier swing excessive of 615–620. Until this zone is decisively breached, the present pullback can’t be thought of a confirmed development reversal.
Jaiprakash Energy Ventures
The inventory has delivered a downward-sloping trendline breakout on the every day chart, supported by an increase in volumes. Momentum indicators are turning constructive. RSI is trending larger, and the DI+ is comfortably above DI- on the ADX, indicating bullish undertones. The inventory wants to carry above the 14.5–14 zone to maintain the transfer. Nevertheless, being a penny inventory, it warrants a cautious strategy.
IDBI Financial institution
The inventory witnessed a pointy gap-down of practically 17% on sixteenth March and has continued to float decrease since then. RSI stays weak at round 25, highlighting persistent bearish momentum. So long as the inventory trades beneath the 80–82 zone, the broader development is more likely to stay destructive.
Bandhan Financial institution
The inventory has corrected practically 17% from its latest excessive of 190 recorded on twenty sixth February. It continues to commerce beneath key shifting averages, whereas the MACD stays beneath each the zero line and sign line, indicating sustained weak point. The development is more likely to keep bearish so long as the worth stays beneath 165–167.
BPCL
The inventory Bharat Petroleum Company slipped beneath its 200-day EMA on ninth March and has been beneath strain since. It has corrected practically 26% from its excessive of 390 on twenty seventh February. A rising ADX factors to strengthening bearish momentum. So long as the inventory trades beneath the 307–310 zone, the general development is anticipated to stay weak.
(Disclaimer: The suggestions, options, views, and opinions given by the consultants are their very own. These don’t characterize the views of The Financial Instances.)
