Compression phases often precede strong breakouts in either direction
A Supreme Court ruling against Trump-era tariffs has sent a ripple of optimism eastward, positioning India's benchmark Nifty 50 for a sharp gap-up opening of 350 to 400 points. Yet markets, like all human endeavors, are less defined by their beginnings than by what sustains them — and the index's weeks-long consolidation within a narrow corridor means the real verdict will be written not at the opening bell, but in the hours and sessions that follow. In this moment of compressed volatility and tilted leadership toward banking stocks, the market stands at one of those quiet thresholds where the next meaningful chapter is still being decided.
- A U.S. Supreme Court ruling against Trump-era tariffs has injected rare positive global energy into Indian markets, with Gift Nifty futures pointing to a 350–400 point gap-up — the kind of opening that can shift sentiment overnight.
- Beneath the excitement, the Nifty 50 has been trapped in a 512-point weekly range for two weeks, its RSI compressed for 13 consecutive sessions, and its moving averages flattened — a coiled spring that could release in either direction.
- The 25,950–26,000 resistance zone is the immediate battlefield: a decisive close above it could unlock fresh upside, while a break below 25,350 support risks a sharper slide toward the psychologically significant 25,000 level.
- Bank Nifty is breaking away from the pack, trading near lifetime highs with its ratio to the Nifty at a 33-month peak, all key moving averages aligned bullishly, and a clear path toward new records if 61,700 is breached.
- Stock-specific opportunities are emerging across the board — Indian Bank, Tata Steel, ABB India, NTPC, and others are flashing technical breakout signals, offering traders defined entry zones even as the broader index awaits its directional verdict.
A Supreme Court ruling against Trump-era tariffs has set the stage for a sharp opening in Indian equities, with Gift Nifty futures signaling a 350 to 400 point jump when markets open. But according to Sudeep Shah of SBI Securities, what unfolds in the hours and days after that opening will matter far more than the gap itself.
The Nifty 50 has spent the past two weeks in a tight box — its narrowest weekly range in a month — producing choppy price action and what technicians call an NR4 pattern. Since February 4, the index has consolidated between 26,009 and 25,373, with volatility remaining elevated even as the price range compressed, moving averages flattened, and the daily RSI spent 13 sessions in a narrow band. Historically, Shah notes, such extended compression phases often precede a strong breakout in either direction. The immediate test comes at the 25,950–26,000 resistance zone. Below that, support at 25,350 is critical — a decisive break there could open the door to a correction toward 25,000.
Bank Nifty is telling a different story entirely. The banking benchmark is hovering near lifetime highs while the headline Nifty still trades nearly 3 percent below its record peak, and the Bank Nifty-to-Nifty ratio has climbed to a 33-month high. All key moving averages are aligned positively, the daily RSI sits around 60, and a decisive move above 61,700 could pave the way for new record highs.
Shah's top picks reflect this technical strength. Indian Bank has broken a horizontal trendline on the weekly scale with a sizeable bullish candle, backed by a PSU Bank index that surged over 5 percent last week. He recommends accumulating between Rs 938 and 948, targeting Rs 1,010 with a stop-loss at Rs 915. Tata Steel, after three consecutive bullish monthly closes and trading near all-time highs, is recommended in the Rs 207–209 zone, targeting Rs 225 with a stop-loss at Rs 200.
Beyond these two, constructive signals are emerging across ABB India, Hitachi Energy, KEI Industries, NTPC, and Apar Industries — each showing trendline breakouts, volume confirmation, or successful gap-up holds. The broader technical landscape is one of compression giving way to opportunity, but the direction of that release remains, for now, an open question.
A Supreme Court ruling against Trump-era tariffs has set the stage for a sharp opening in Indian equities. Gift Nifty futures are signaling a jump of 350 to 400 points when markets open, riding the wave of positive global sentiment that the court's decision is expected to trigger. But according to Sudeep Shah, head of technical and derivatives research at SBI Securities, what happens in the hours and days after that opening will matter far more than the gap itself.
The Nifty 50 has spent the past two weeks in a tight box. Last week, the index moved within a 512-point band—its narrowest weekly range in a month—creating what technicians call an NR4 pattern. The price action was choppy: three days of gradual pullback, then Thursday's sharp reversal that erased earlier gains, then Friday's bounce off the lower edge of the range. Beneath this surface choppiness, something structural may be shifting. Since February 4, the index has been consolidating between 26,009 and 25,373. Volatility has remained elevated even as the price range compressed. The key moving averages have flattened. The daily RSI has spent the last 13 sessions in a compressed band. Historically, Shah notes, such extended compression phases often precede a strong breakout in either direction.
The immediate test will come at 25,950 to 26,000—a resistance zone where the index's next meaningful move will be decided. Below that, support sits at 25,400 to 25,350, marked by the confluence of multiple previous swing lows. A decisive break below 25,350 could open the door to a sharper correction toward 25,000. For now, Shah expects the index to continue moving sideways in the near term, with stock-specific opportunities remaining active.
Bank Nifty, meanwhile, is telling a different story. The banking benchmark is a clear outperformer, hovering near its lifetime highs while the headline Nifty still trades nearly 3 percent below its record peak. The Bank Nifty to Nifty ratio has climbed to a 33-month high, signaling that market leadership is firmly tilted toward banking stocks. Technically, the setup is decisively bullish. All key moving averages are aligned positively. The daily RSI sits comfortably around 60, indicating sustained momentum, while the weekly RSI has advanced further into bullish territory. The 20-day exponential moving average zone of 60,500 to 60,400 serves as important support. On the upside, 61,600 to 61,700 stands as the immediate hurdle. A decisive move above 61,700 could pave the way for new record highs.
Shah's top two stock picks reflect this technical strength. Indian Bank has given a horizontal trendline breakout on a weekly scale and formed a sizeable bullish candle. The PSU Bank index has surged over 5 percent in the last week, and the ratio chart comparing it to the Nifty is at a 98-month high. All moving averages and momentum indicators are suggesting strong bullish momentum. Shah recommends accumulating the stock in the zone of Rs 938 to 948, with a stop-loss at Rs 915, targeting Rs 1,010 in the short term. Tata Steel has witnessed three consecutive bullish monthly closes and is trading near its all-time high. The stock continues to form a higher high–higher low structure on the daily scale and is consolidating at higher levels. It is trading above its key exponential moving averages, with RSI sustaining above 60 and MACD in positive territory. Shah recommends accumulating in the zone of Rs 207 to 209, with a stop-loss at Rs 200, targeting Rs 225 in the short term.
Other stocks showing constructive signals include ABB India, which gave a downward-sloping trendline breakout on January 29 and recently broke above its Rs 5,583 to 5,940 consolidation band on February 20 with a sharp spike in volumes. Hitachi Energy and KEI Industries are both showing strengthening momentum, with horizontal trendline breakouts on the daily chart and prices holding comfortably above key moving averages. NTPC has broken out of its Rs 361 to 372 consolidation range with healthy volume pickup, while Apar Industries has delivered a horizontal trendline breakout and successfully held a gap-up move from February 3. The technical landscape, in short, is one of compression giving way to opportunity—but the direction remains to be determined.
Notable Quotes
How the index reacts around these key levels will determine the next meaningful directional move— Sudeep Shah, SBI Securities
Prolonged consolidation has caused key moving averages to flatten, reflecting the absence of a clear trend— Sudeep Shah, SBI Securities
The Hearth Conversation Another angle on the story
So the Supreme Court ruling on tariffs is supposed to push the market up 350 to 400 points at the open. That sounds like a done deal.
It sounds that way, but Shah is careful about it. The gap-up is likely, yes. But a gap-up opening doesn't mean the market will stay there. What matters is what happens when the index reaches 25,950 to 26,000. That's where the real test is.
Why is that zone so important?
Because the index has been stuck in a tight range for two weeks. All that compression—the flattened moving averages, the RSI stuck in a narrow band—it's building pressure. When that pressure releases, it could go either way. The 25,950 to 26,000 zone is where the market will show its hand.
And if it breaks through?
Then you're looking at a genuine uptrend. But if it gets rejected there, the market could fall back and test support at 25,350. Below that, it gets uglier—potentially down to 25,000.
Bank Nifty seems to be doing better than the main index.
Much better. It's at a 33-month ratio high, meaning it's outperforming the broader market significantly. The technical setup is decisively bullish—all the moving averages are aligned, RSI is strong, the trend is clear. That's where the leadership is right now.
So you'd rather own banks than the broader market?
For now, yes. And within banks, Indian Bank and Tata Steel are showing the clearest technical signals. Both have broken out of consolidation patterns and are trading at or near all-time highs. The momentum indicators are all pointing the same direction.