From The Economic Times · Nikhil Agarwal · · 2m
Nifty's 25-Year Losing Streak
Nifty's 25-year losing streak forces investors to decide if the sell-off ends or continues.
In brief
Nifty's 25-year losing streak forces investors to decide if the sell-off ends or continues. Nifty's longest losing streak in 25 years has breached its 200-week moving average and fallen below 22,600, with analysts warning of potential drops to 20,500 if the level isn't reclaimed. Originally reported by The Economic…
Nifty's 25-Year Losing Streak
Nifty has entered its eighth consecutive weekly decline, the longest losing streak in 25 years.
“Nifty has now entered its eighth consecutive weekly decline, the longest losing streak in 25 years.”
Breached 200-Week Moving Average
The index has breached its 200-week moving average and slipped below the crucial 22,600 level for the first time since the Covid crash.
“The index has breached its 200-week moving average and slipped below the crucial 22,600 level for the first time since the Covid crash.”
LKP Securities Analyst Rupak De
LKP Securities' Senior Technical Analyst Rupak De says investors should remain cautious, reduce high long exposure and wait for a decisive move above 22,600 before adding back positions.
“LKP Securities' Senior Technical Analyst Rupak De says investors should remain cautious, reduce high long exposure and wait for a decisive move above 22,600 before adding back positions.”
Potential Drop to 20,500
If the level continues to cap gains, Nifty could eventually head towards 20,500.
“If the level continues to cap gains, Nifty could eventually head towards 20,500.”
Historical Context
In 2020, Nifty fell 27% after slipping below the 200-week moving average; in 2008, it fell 38% after similar breakdowns.
“In 2020, Nifty fell 27% after slipping below the 200-week moving average; in 2008, it fell 38% after similar breakdowns.”
Recent Reversals
In 2011, 2013 and 2016, Nifty broke below the 200-week moving average but reversed quickly after a 2, 6% correction.
“In 2011, 2013 and 2.016, Nifty broke below the 200-week moving average but reversed quickly after a 2, 6% correction.”
Market Sentiment
Market breadth has deteriorated sharply, with mid- and small-caps also coming under pressure.
“Market breadth has deteriorated sharply, with mid- and small-caps also coming under pressure.”
FII Outflows
Massive outflows of FII money have been driven by no AI participation, US tariffs, the US-Israel-Iran war, and a rise in crude oil prices.
“Massive outflows of FII money have been driven by no AI participation, US tariffs, the US-Israel-Iran war, and a rise in crude oil prices.”
Bond Yield Impact
A sharp rise in the US 10-year bond yield has led to massive outflows of FII money and a fall in the spread between US and India 10-year bond yields.
“A sharp rise in the US 10-year bond yield has led to massive outflows of FII money and a fall in the spread between US and India 10-year bond yields.”
Auto Stocks Weakness
Most auto stocks were not doing great, with weakness already visible in both four-wheelers and two-wheelers.
“Most auto stocks were not doing great, with weakness already visible in both four-wheelers and two-wheelers.”
Trading Ideas
Sell ADANIPORT below Rs 1,730; SL Rs 1,760; target Rs 1,670 (spot levels). Buy NYKAA above Rs 325; SL Rs 314; target Rs 343.
“Sell ADANIPORT below Rs 1,730; SL Rs 1,760; target Rs 1,670 (spot levels). Buy NYKAA above Rs 325; SL Rs 314; target Rs 343.”
Market Correction
Investors should cut high long exposure as long as Nifty remains below 22,600 and wait for a decisive move above 22,600 before adding back positions.
“Investors should cut high long exposure as long as Nifty remains below 22,600 and wait for a decisive move above 22,600 before adding back positions.”
The short version
Nifty's longest losing streak in 25 years has breached its 200-week moving average and fallen below 22,600, with analysts warning of potential drops to 20,500 if the level isn't reclaimed.
