By VK Sharma
If one recalls, we had said last fortnight that a gentle nudge above the 25,100 mark can be sufficient to induce a change of heart among foreign institutional investors (FIIs). But a close above 25,400 will send even the most battle-hardened FII scurrying for cover.
That is precisely what happened when the Nifty closed above the 25,400 mark. FIIs’ short positions, which were at their highest at 98% earlier last week, were down to 80% by Friday evening. The great short covering has just begun.
Technically speaking, the Nifty is now on a firm wicket. It is cruising comfortably above all its important averages. It is making higher tops and higher bottoms, and oscillators are also well placed.
But the most important development is that the Nifty has pierced the trendline number 74, which was drawn by joining the all-time high marks of 26,277 seen in September 2024 and 25,669 registered in June 2025.
This puts the Nifty on course to new highs. Round figures in the benchmark tend to act as resistance. So, the level of 26,000 will do its duty. This is the resistance number beyond the high of 25,781 seen on Friday. The all-time high mark of 26,227 seen in September 2024 will be an important mark as well. The current move sets a target of 26,600.
Considering the fact that the benchmark has racked up 1,194 points in the last 12 sessions, any sideways or corrective move may not be out of place.
Should a correction happen, the first meaningful support would be 25,508. The trendline number 74, which had so far acted as a resistance, will now act as a support. The support on this trendline is currently placed at 25,450. It would be in place to remember that since this is a downward sloping trendline, the support will gradually shift lower.
In terms of Fibonacci retracement levels, a 38.2% retracement of the gains in this swing could give us support at 25,325.
Now, let us focus on the larger picture. Despite the Nifty closing at a 52-week high, it has gained just 5.37% since the last Diwali. This pales in comparison to Nikkei’s 24.75% and the Nasdaq 23.16% appreciation in the same period.
(The writer is a technical analyst & former head of clients’ group, HDFC Securities.)