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Small cap scale new High while Nifty defends 24000 level

ICICIdirect Research 21 Aug 2026 DISCLAIMER

Equity benchmark extended losses over second consecutive week largely pressured by jump in crude oil prices. Nifty settled the week at 24240, down 0.5%. In contrast, broader market showed remarkable resilience. Smallcap index stole the spotlight, scaling to fresh all-time highs, up 1.3%.
On the sectoral front rotation continued as Capital Market index regained momentum after two months breather accompanied by buying interest in realty and metal while FMCG, IT extended breather.

What we expect:

  • The index has once again defended its four months rising trend line (placed around 24000) despite geopolitical uncertainty. Thereby, 24000-23800 remains the primary line of defense which we expect to hold.
  • By snapping 12 sessions corrective phase, the index has triggered a classic reversal pattern. Similar pattern was observed during Sept-25 & Jun-26. In both cases, after breaking 8-12 sessions corrective phase, index staged a 5-6% rally in subsequent weeks.
  • The current structural shift highlights revival in momentum and restore the positive bias wherein we expect Nifty to gradually resolve higher towards 24600 levels in coming weeks.
  • Defying the headline volatility, buoyancy reinstated in Small cap index that surged to new highs. The rising ratio chart of Small cap / Nifty reinforces our conviction for sustained outperformance in the broader market.
  • Off April lows, index has built a series of higher bases. Crucially, market breadth at each base expanded sharply, moving from 19% to 38%, 48% and now at 56%. This strengthening breadth amid geopolitical uncertainty clearly indicates that negativity is already priced in and now focus is on the stocks backed by strong earnings
  • After Brent crude peaked at $120 in March, intermediate rallies have exhausted around the 80% retracement of prevailing decline. Following the historical rhythm, the current 80% mark is placed at 97 which would act as stiff resistance

Key Monitorable:

  • US and India GDP
  • Monthly Expiry
  • Potential relief if brent crude reverses from key resistance of $97

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