India's benchmark Nifty 50 index's recent decline from its February highs is beginning to show signs of exhaustion, according to multinational brokerage firm CLSA. Technical analyst Laurence Balanco said in a note that while the blue-chip index has posted fresh price lows this week, the daily Relative Strength Index (RSI) has failed to confirm these levels, showing an early technical signal that downside momentum may be slowing.
He highlighted that this emerging momentum divergence, coupled with strong technical support in the 21,743–21,800 zone, is creating conditions for a potential rebound rally in the coming weeks. Such divergences are often viewed by technical analysts as precursors to a trend stabilisation or short-term reversal.
From a tactical standpoint, CLSA described the current setup as a "bottom-fishing" opportunity. The brokerage expects the Nifty to remain range-bound within its broader 2024 year-to-date trading band, with support at 21,743-21,800 and resistance seen in the 26,270–26,340 range.
The 50-stock Nifty settled 488.20 points or 2.14% lower at 22,331.40 on Monday. The index is down 14.5% year-to-date, 11.3% in the last one month and 4,042 points below its all-time high of 26,373 marked on Jan. 2.
For the financial year ended March 2026, the Nifty declined more than 5%.
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The ongoing Iran war, high oil prices, weak rupee and relentless foreign portfolio fund outflows have weighed on Dalal Street. FPIs have sold Indian shares for 21 consecutive sessions.
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