The Nifty index has hit a rough patch recently, leaving investors questioning whether this is a moment of pause for the market to consolidate or an unmissable opportunity for long-term investment. The sharp movements and global headwinds have raised eyebrows, but beneath the surface, there’s more to the story.
The Nifty current standing of Nifty is as follows:
- Four straight sessions of losses, with the index down about 2% in this period.
- It opened below 23,200 on January 13, dropping over 1% in early trade.
- Closed at 23,431 on January 10, marking a 2.39% decline for the week.
From a technical standpoint, the signals don’t look great for the short term. The Nifty has slipped below its 50-week EMA of 23,442, a level that typically acts as strong support. It’s also close to forming a “Death Cross,” where the 50-day moving average falls below the 200-day moving average — a classic sign of bearish momentum. And the Relative Strength Index (RSI) hasn’t reached oversold levels yet, which means there could still be room for more downside.
Significant markers to track:
- Support: 23,223 to 23,094—if the index breaks below this, the downward trend could accelerate.
- Resistance: 23,640 to 23,769—a move above this would hint at some recovery.
Why is this happening?
A mix of global and domestic factors is at play. The US just reported stronger-than-expected jobs data, adding 256,000 jobs in December. This dampens hopes for aggressive Federal Reserve rate cuts, keeping global liquidity tight. Add to this the rise in US bond yields and a strengthening dollar, and you get reduced foreign flows into Indian markets. Domestically, Brent crude prices have surged to $81 per barrel, raising inflation worries and squeezing corporate margins.
Sector-wise, the pain is uneven. The IT sector is holding up, with a 3.6% gain recently, thanks to TCS’s strong performance. But financials, mid-caps, and realty stocks are under pressure. The Nifty Realty Index fell 4.5% intraday on January 13, extending its six-session drop to 12%.
So, is this a buying opportunity? It’s not that simple. While the current weakness might offer lower entry points, jumping in now could be risky given the bearish indicators. For long-term investors, patience is key. A phased investment approach, spreading purchases over time, can help reduce the impact of volatility.
Focus on sectors showing resilience, like IT and pharmaceuticals, and keep an eye on global trends like oil prices and US interest rate policies. What’s your take on the Nifty’s next move? Let’s hear your thoughts!