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Consolidation helps to build runway for market take off…

ICICIdirect Research 13 Feb 2026 DISCLAIMER

Equity benchmark pared some of its last week’s gains amid mounting fear of AI led disruption. Nifty settled the week at 25550 with a cut of 0.5%. Broader market defied the global trend as Nifty midcap remained unchanged while small cap gained 0.5%. Sectorally, Defense, PSU Banks, auto remained at forefront.

What to expect: We expect index to consolidate in the broader range of 26000-25200 wherein focus should be on accumulating beneficiaries of trade deal of India with US & European Union.

Our constructive bias is further validated by following observations:

  • Index is undergoing slower pace of retracement wherein over past eight sessions it merely retraced 50% of two days sharp up move (24572-26340). Such a healthy consolidation is providing launchpad to challenge All time high (26350) and open the door for directional trend in coming weeks.
  • On the broader market front, Nifty midcap index has rebounded from 52 weeks EMA which has been held firm since past nine months while small cap index witnessed sharp pullback from lower band of six months falling channel. The improving market breadth would result into broadening of the ongoing rally.
  • Market breadth has been witnessing improvement, as the percentage of stocks trading above their 50 days SMA has bounced from bearish extremes of 15% to 42% levels, while percentage of stocks above 200-day SMA within the Nifty 500 universe enhanced to 38%. Historically, such contractions in breadth have preceded durable market bottoms, with extreme bearish readings near 15%
  • Nifty IT: Since CY-06, IT index has witnessed a maximum price wise correction of 34% and time wise correction of 6-7 quarters. Post such phases, the index has typically made new highs. With current week’s sharp decline, it has completed 30% correction. Thereby focus should be on accumulating quality IT stocks in a staggered manner as it approaches maturity of price and time wise maturity.

 

Key Monitorable:

FII’s inflow: The FII’s have seen persistent buying demand wherein they have bought >6000 cr in the month of Feb. Continuous inflow would boost the market sentiment

Brent Crude: Once again retreated from key hurdle of $70-72 range. Only a decisive close above $72 would fuel the momentum for next leg of up move

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