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Indian equities started the year on a subdued note on the back of volatile global cues amid geopolitical concerns

ICICIdirect Research 16 Jan 2026 DISCLAIMER

Key Highlight
Over past two months the Nifty has been confined in a tight trading range of 26300-25300 amid clouds of uncertainty tracking lack of clarity on the US-India Bilateral deal and other geopolitical concerns
FIIs continued with their negative bias at the start of the new year as well and sold nearly ~15k crores in the equities so far in January
India VIX (Fear factor) has also risen sharply to 12% from 9.2% seen at the start of the year.
Expect prolongation of consolidation in the 26300-25300 range amid stocks specific action onset of Q3 earning season
Since Oct 2025, multiple intermediate corrections to the turn of 3-4% offered incremental buying opportunity followed by gradual recovery in subsequent weeks.
With current ~3.4% already in place along with oversold conditions, we advise investors to refrain from creating aggressive selling at current levels, rather focus on accumulating quality stocks backed by strong fundamentals as key support is placed at 25300, based on following observations:
a)     4% correction from All Time High will mature at 25320 
b)     Placement of 200 day-EMA that has been held since April 2025, 25150
 
Broader market & Breadth:
a)     The Nifty 500 has already delivered a 24% rally from its April 2025 lows and now sits just 4% away of its all-time high recorded in September 2024. At first glance, investors might worry that the market is running out of steam. But a closer look at the internals tells a very different story. This rally still has fuel left in the tank.
b)     Historically, market breadth bottoms out when the percentage of stocks above the 200-day SMA reverses below 15%, and rallies tend to exhaust themselves only when this figure climbs near 90%.
c)     After bottoming out in early 2025, the breadth is now sitting at 40%. That’s not exhaustion, it’s less than equilibrium. It signals that many stocks still have room to run up in the coming weeks that would drive index beyond All Time High and open the door for next leg of up move.

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