NIFTY MAY HIT A MAJOR BREAKDOWN BELOW 24800! CRUCIAL BREAKOUT NOW SEEN ONLY ABOVE 25256!

Dated: 26/07/2025

Bears tried to tighten their grip last week as Nifty failed to move above 25256 & gave a bearish closing below 25000 levels but somehow managed to hold on to the crucial support levels of 24800-24900 to give a close at 24837. Bulls have been on the back foot as FII once again started selling consistently let it is lesser in quantity or higher but the consistent selling is putting the pressure in the broader markets entirely. No FTA with either of the country US or UK nothing major good news by the heavy weights so far is not letting the Nifty to the higher grounds.

Nifty once again gave a mere 0.52% correction WoW basis but from the recent top of 25669.35 it has corrected almost 3.36% but the stock specific correction has been witnessed from 2-3% to 8-10% ranging from large-caps to mid & small caps with the major impact of results oriented stocks other than those remained largely into consolidation mode. This we have already stated in our last week article that a uni-directional move is highly likely to show some movement on the either side but more often on the upper side of the wall but the impacted FII’s selling tensed the move towards the lower end of the channel where 24800-24900 remained a crucial support zones & it stopped right there.

However, as earlier mentioned the geopolitical uncertainties have created certain aspects of issues among the other asset classes. Major factors are concerned like currencies / metals / crude oil etc we had specifically mentioned that there will be minimal effect on the domestic Equity markets despite the ongoing global uncertainties. The major effect may only come if Crude Oil surpassed 80$ per barrel which worked perfectly & our downward target of 70$ per barrel also got completed with low’s near to 65.93$ per barrel followed by India Vix where we clearly mentioned the downward target of 11 so far it has already tested 9.90 so far & we already mentioned & once the consolidation is done the Vix may rise towards 14 which so far has tested 11.58 we continue to expect it to test 14 in coming week ahead along with the rising indices either in the last week of July or in the month of August 2025 which though signifies the positive momentum but the traders will remain confused as what to do in the higher Vix environment which resembles Volatility in the Equity markets.

Nifty has finally succeeded to break-down the consolidation channel following this if 24800 further gets broken down then 24400 followed by 23900 could be witnessed in next 2-3 weeks but if this remains safe another attempt to break 25256 could be made on the upper side which now remain as an immediate hurdle zone & once this gets broken 25700 followed by 26000-26250 kind of levels. As if the bullish momentum continues above these our levels of 27000 could possibly get tested by 4-5 weeks possibly in higher India Vix environments. Major sector specific rotations could be possible within the stipulated time.

Having a weaker sector where Banks & IT stocks have put major pressure into the markets & no other sector has significantly supported the broader markets. Supports now are expected to come from the stocks which posts good Q1 results following buying into the broader markets.

On the other hand Dollar Index declined to as low as 96.38 to hit 3 years low to give a decisive close at 97.66 which so far remained a positive factor but if it moves ahead 99 then a rise in this could lead towards 102 which may create some issues in the domestic Equity markets in short term. While the resultant impact on USDINR (Rupee) remained low to hit 85.183 to give a decisive close at 86.476 but whatever the impact may be on Dollar Index USDINR doesn’t look like could move above 87 in any near term rather a consolidative move could be witnessed here. But if the flow comes we do expect 84 to come but could be delayed till the end of August 2025 now(Big Positive thing). Meanwhile metals like Gold & Silver stayed remained stable on higher levels (Nor negative nor positive) resulted in a stable scenario for Equities.

However, in Nifty we have previously mentioned that Nifty in the last five months mainly March-April-May & so far in June 2025 shown immense strong rally from the lower levels of 21743.65 to testing high’s of 25662.40 in June 2025 came a long way of recovery almost 18% from the lower levels forming consecutive 4 bullish candles on monthly charts which suggests the continuation of bullish move ahead in the month of June as well as in July followed by massive growth in India’s Q4 GDP of 7.40%. However, Nifty taken support of 24800-24900 any break below could result in 24400 followed by 23900 kind of levels while major upside immediate hurdle remains at 25256 followed by 25700 on the upper range of 26000-26250 but the road to this may slow & gradual as India Vix may now remain sideways to hit high’s towards 13-14 gradually.

These day’s along with the broader markets the Portfolio’s too remained under pressure let it be large cap / mid-cap of small cap’s. FII’s too turned net sellers once again which consistently puts pressure into the broader markets.

The Indian Equity markets have gained many recent news items where major of the news items are mentioned below:

• Rupee remained stable at 86.536 from its recent high’s of 86.916 which is highly likely to hit 84 in next 2 months time frame

• Continuous easing up of Dollar index & made low of 96.38 to now well settled at 98.21 any move above 99 could lead this towards 102

• Brent Crude tested low’s of 65.93$ & as earlier anticipated tested low’s of 70$ to now settled near to 68-69$ per barrel.

FII’s so far since October 2024 to till 2^nd Week of March 2025 remained on the Net sell side with significant sell off & putting significant pressure on Indian domestic markets & had no as their relentless selling has been nonstop where since the beginning of the October 2024 month FII’s have done massive selling amounting to Rs. 3,07,360.09 crore combined of October, November, December, January, February, March, April & May 2025. On the contrary DII’s were the main supporters of the entire Indian domestic Equity Markets with whopping buying of Rs. 4,03,192.39 cr. since the beginning of October 2024 & in the Calendar year 2024 they have bought more than Rs. 5.26 Lacs cr. & Rs. 2.25 lac crore approx. so far in 2025.

On the other side FII’s net hit 14-15% which if turnarounds may head 34-36% which may further again increase towards 45% almost & we have consistently been mentioning this to improve lastly which continuously signifies & has now possible bottom formation 21700-22000 which indeed has turned the game & bottom was formed in Nifty. Now we expect the FII’s long positions to rise further towards 67% in the coming months ahead which may take Nifty & broader markets again on the higher levels.

In the wholesome broader markets witnessed some key events & their outcomes last week which are described as follows:

Domestic News:

• Govt approves restructuring of boards at NTPC arms THDC India NEEPCO

• lIC invests RS 5000cr in SBI’s RS 25k cr QIP

• FIIs trim stakes in six Adani Group firms in Q1; sell-off totals Rs 4,640 cr

• Tata Group firm worth Rs 49469 crore teams p with this tech giant to build to invest Rs 430 crore in….

• PhonePe partners with SBI Cards for second co-branded card after alliance with HDFC Bank

• Infosys collaborates with AGCO to deliver IT and HR Operations Transformation

• Reliance Industries to start solar cell production in India

• India-UK trade deal: UK to allow imports from India of 17,600 electric, Hybrid, Hydrogen run cars up to £80,000 value in 6th year- statement

• India to become world’s third largest economy by 2028 GDP to hit $10.6 trillion by 2035-5 states may cross $1 trillion each

• India FX reserves, USD actual: 695.49B vs 696.67B previous

• India’s top IT companies headcount in Q1 fy26

  1. TCS added 5,090 employees

  2. Infosys added 210 employees

  3. HCLTECH drops 269 employees

  4. WIPRO drops 114 employees

  5. TECH MAHINDRA drops 622 employees

  6. LTIMINDTREE drops 418 employees

• Rupee remained stable at 86.536 from its recent high’s of 86.916 which is highly likely to hit 84 in next 2 months time frame

• Continuous easing up of Dollar index & made low of 96.38 to now well settled at 98.21 any move above 99 could lead this towards 102

• Brent Crude tested low’s of 65.93$ & as earlier anticipated tested low’s of 70$ to now settled near to 68-69$ per barrel.

International news:

• China keeps key lending rates unchanged AMID lingering weak consumer sentiment in world’s second- largest economy

• US and EU would waive tariffs on some products, including aircraft, spirits and medical devices

• US and EU near agreement on 15% tariffs deal

• Trump trade deals so far

• UK- 10%reciprocal tariff; autos capped at 10%

• Vietnam-20% tariff (down from 46% threat) 40% penalty on transshipment

• Philippines-19% tariff (vs 32% threatened)

• Japan – 15% tariff (vs 25% threat); auto tariff fixed at 15%

• easing up of Dollar index & made low of 96.38 to now well settled at 98.21 any move above 99 could lead this towards 102

• Brent Crude tested low’s of 65.93$ & as earlier anticipated tested low’s of 70$ to now settled near to 68-69$ per barrel.

Nifty last week made another high’s 25243.30 & closed at 24837 with net loss of 0.52% for the week.

Nifty has finally succeeded to break-down the consolidation channel following this if 24800 further gets broken down then 24400 followed by 23900 could be witnessed in next 2-3 weeks but if this remains safe another attempt to break 25256 could be made on the upper side which now remain as an immediate hurdle zone & once this gets broken 25700 followed by 26000-26250 kind of levels. As if the bullish momentum continues above these our levels of 27000 could possibly get tested by 4-5 weeks possibly in higher India Vix environments. Major sector specific rotations could be possible within the stipulated time. Having a weaker sector where Banks & IT stocks have put major pressure into the markets & no other sector has significantly supported the broader markets. Supports now are expected to come from the stocks which posts good Q1 results following buying into the broader markets.

Sensex made high last week at 82785.42 to give a close at 81463.09 with net loss of 0.37%. As earlier mentioned an immediate hurdle may come at 82800 any move above this could lead us towards 84100 could come followed by 87000-88000 could be imminent but the move may get delayed by 5-6 weeks. However the crucial supports still remains within our pre-defined levels of 81000 kind of levels. Having a weaker sector where Banks & IT stocks have put major pressure into the markets & no other sector has significantly supported the broader markets. Supports now are expected to come from the stocks which posts good Q1 results following buying into the broader markets.

The Bank Nifty so far has almost tested near our levels of 58000 making high’s of 57628.40. We continue to remain neutral in this counter where major hurdle now remains at 58000 while crucial support remains at 56000 kinds of levels below this we could get a breakdown towards 54500 in 2-3 weeks time frame.

Meanwhile Nifty Financial Services may continue to have targets of 28000-28200 while crucial supports now lie at 26500 kinds of levels. Major move could be for a consolidative move.

The “Nifty IT” is now on a verge of breakdown towards another major support which could be tested towards 34000 followed by the upside potential now remains restrictive to 40000 mark but may get delayed by 5-6 weeks time frame with major heavy weight like TCS Infosys & Wipro continued to remain into focus for the moves ahead.

As of February 2025 the number of Demat Accounts has declined to whopping 19cr. this not only helps the capital markets directly but also directly to Equity investments.

The monthly SIP in Indian markets now remains almost stable at Rs. 26,632 cr. per month.

Brief Levels of Nifty / Sensex/ Bank Nifty / Nifty Financials / Nifty IT:

Nifty CMP:  24837
Nifty Potential Upside Target: 25256 / 25700 / 26000-26250 / 27000 (As the case may be)
Nifty Immediate Support: 24800-24900 / 24400/ 23900 (As the case may be)

Sensex CMP: 81463.09
Sensex Potential Upside Target: 84100 / 87000-88000 (As the case may be)
Sensex Immediate Support: 81000

Bank Nifty CMP:  56528.90
Bank Nifty Immediate Hurdle: 58000
Bank Nifty Immediate Support: 56000 / 54500 (As the case may  be)

Nifty Financial CMP: 26808
Nifty Financial Immediate Target: 28000-28200
Nifty Financial Immediate Support: 26000-26500

Nifty IT CMP: 35623.75
Nifty IT Potential Upside Target: 40000
Nifty IT Immediate Support: 34000

Stock on Radar:

Large Caps:

• Mahindra & Mahindra (CMP 3247): This counter is on the edge of major resistance which lies at 3330 trades with high risk appetite can short this counter at CMP 3247 with strict SL placed at 3350 for a potential downside towards 3100.

• HDFC Life (CMP 762): This insurance counter looks short term bullish from CMP 762 with strict SL placed at 730 one can expect a potential upside towards 800+ in no time.

• Piramal Pharma (CMP 201): This counter has tend to give breakout in short term which results in good accumulation at CMP 201 with strict SL placed at 18 one can expect a potential upside towards 240 in short run

Mid-Caps:

• PVR (CMP 1000): As the bigger project movie of MCU(Fantastic Four) released last week which could boost some earnings in this counter so one can add here at CMP 100 with strict SL placed at 900 for potential upside towards 1190 in 2 months time frame.

• Ola Electric (CMP 41): This counter has seen too much of negativity with investors having high risk appetite can accumulate this counter at CMP 41 & can add more if comes to 35 with strict long term SL of 30 one can look for a possible move towards 60-80 in 6 months time frame from hereonwards.

About the Author:

Mr. Vishal Gupta a SEBI Registered Research Analyst is the founder of “VG STOCK RESEARCH”, founder of “THE ANALYSIS ROOM”, a writer & an advisor having rich experience in Indian Equity Markets who has spent years comprehending an industry wide shift and risk management with more than 13+ years exploring in depth analysis of the Equity & Derivatives with accuracy of 90% and above.

He has also been into teaching Fundamental Analysis for quite some time giving investors/traders comprehensive knowledge & skills of Indian Equity Markets.

Email I’d: contact@vgstockresearch.com
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