Although the sharp fall has pushed markets into oversold territory, ongoing geopolitical tensions continue to keep investors on edge. In such a volatile environment, a meaningful or structural reversal in the near term still appears distant. But is a relief rally possible? Experts weigh in.
“From a technical perspective, the Nifty has decisively broken below the crucial 24,050 zone, which coincides with the 100-week EMA, a level that historically acted as a strong reversal point. This breakdown signals deterioration in the broader technical structure and suggests that downside momentum is gaining traction. Momentum indicators remain weak, with the weekly RSI facing rejection near 50 and trending lower, indicating that a clear reversal signal is still absent,” said Hitesh Tailor, Technical Research Analyst at Choice Broking.
If geopolitical tensions continue to escalate and volatility remains elevated, the Nifty 50 could extend its decline toward the 23,000-22,900 zone, the next key short-term support area where some demand or short covering may emerge. On the upside, the 24,300-24,500 band is likely to act as a strong resistance zone, and any relief rally toward this range may face supply and profit-booking pressure, he warned.
A plunge to 23,535 would complete a 61.8% retracement of the upmove since March 2025. Breaching this level could trigger multi-leg downsides, initially targeting the March 2025 low near 22,000 and the November 2023 low near 19,000. Near-term upside prospects will depend on the index’s ability to hold above 24,000, said Anand James of Geojit Investments Ltd.
The recent correction mirrors patterns seen during previous geopolitical shocks. From the 2nd March closing of 25,178 to the 9th March low, the Nifty has declined about 5.85% (nearly 1,480 points), while the Sensex has corrected around 4,750 points in just a few sessions amid rising crude prices and global risk aversion. A similar reaction was witnessed during the Russia–Ukraine war, when markets fell roughly 4.8–5% before stabilizing and eventually delivering 15–25% returns over the next 12–18 months.
Technically, the index is in an oversold zone with RSI near 27, with supports at 23,700/23,300 and resistance at 24,350/24,800. Implied volatility remains elevated, with India VIX near 24, indicating a high-volatility environment. Traders are advised to remain cautious at current levels and consider initiating fresh long or short positions only after the market stabilizes, said Vatsal Bhuva of LKP Securities.
Today’s market snapshot:
Indian stock markets crashed sharply on Monday, with the Sensex and Nifty plunging 3% each, extending losses from last week. The escalation of the war between Iran and Israel-US over the weekend sent crude oil prices soaring, raising concerns over India’s rupee and macroeconomic stability.
Crude oil surged nearly 30% in a single session, on track for its largest one-day gain, amid fears of a prolonged closure of the Strait of Hormuz and resulting supply disruptions.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)