The Indian equity market is currently navigating through a phase of heightened uncertainty and sustained pressure. Monday’s trading session once again highlighted how global developments, combined with technical breakdowns, can significantly influence market sentiment. Nifty closed near the 25,585 level on a spot basis, declining by approximately 0.42 percent. More importantly, the index has decisively slipped below its 100-day exponential moving average, signalling a meaningful shift in the medium-term trend.
This breakdown is not just a technical event on the charts; it reflects a deeper change in market psychology. The comfort that bulls enjoyed over the past several months appears to be fading, while sellers are gaining confidence on every rise.
Global Developments and Their Impact on Market Sentiment
If we look at the geopolitical backdrop, the current global environment feels unusual and unsettling, almost unlike anything seen in recent decades. When the leadership of the world’s most powerful nation begins to act in an unpredictable and aggressive manner, financial markets across the globe are bound to remain uneasy.
Recent actions and statements by US President Donald Trump have added to this discomfort. From attempting to claim credit for a Nobel Prize awarded to someone else, to floating unconventional ideas such as a Gaza Peace Committee demanding one billion dollars from participating nations, the nature of global leadership itself has come under question. These developments may sound political, but markets respond sharply to such behaviour because they increase uncertainty.
The situation has become even more complex on the trade front. Countries that were once close allies of the United States under organisations like NATO are now facing direct pressure. The sudden imposition of a 10 percent tariff on European Union countries that opposed the idea of Greenland coming under US control has raised serious concerns. What makes this move more troubling is the fact that trade agreements with these very EU nations had already been signed earlier. This naturally leads to doubts about the credibility and stability of existing trade deals.
At the same time, reports have emerged of India implementing a 30 percent tariff on certain US imports of pulses. The real implications of this move will become clearer as discussions around the India–US trade deal continue. For now, it appears that negotiations have produced more conversations than concrete outcomes. Globally, nations are increasingly prioritising their own economic interests. Canada restructuring its trade relationship with China by offering automobile import relaxations in exchange for agricultural export benefits is a clear example. India too is actively reshaping its trade ties with the EU and other global partners, recognising that US trade policy under the current leadership remains highly unpredictable.
Q3 Earnings Season: Mixed Signals for Indian Markets
On the domestic front, the Q3 earnings season has so far delivered mixed results. Reliance Industries reported numbers that remained largely neutral and fell short of market expectations, offering little support to the broader indices. ICICI Bank, despite its strong long-term track record, surprised the market with relatively weaker results, adding to the pressure on the banking space.
However, there were positives as well. HDFC Bank’s Q3 performance came in strong, providing some reassurance to investors. Overall, the earnings season still appears to be leaning towards a mixed-to-positive outcome, with a reasonable possibility of improvement as more companies announce their results.
From an investor’s perspective, the market has been painful for nearly a year now, and the discomfort seems to be increasing with every corrective phase. For experienced long-term investors, this is not a new experience. Markets have always rewarded patience over time. However, for new investors, this environment offers valuable lessons. Remaining invested, focusing on quality assets, and gradually increasing exposure during periods of uncertainty can prove beneficial in the long run. Ignoring daily market noise and short-term volatility often becomes the key differentiator between success and failure in investing.
Technical Structure of Nifty: Bears in Control
From a technical standpoint, Nifty’s structure currently favours the bears. The decisive breakdown below the 100-day EMA confirms that the earlier bullish trend has been violated. Price action does not show any immediate signs of strength, and selling pressure continues to dominate.
On the spot index, the next important support is visible near the 25,400 level. Until the market shows signs of stability around this zone, bulls may continue to struggle.
Nifty Futures: What Worked in the Previous Session
In the previous analysis, it was clearly mentioned that if Nifty Futures slipped below the 25,720 level, a short-side intraday opportunity could emerge. The market respected this setup perfectly. Nifty Futures opened with a gap down near 25,669 and moved in a near single-direction decline, delivering close to 139 points on the downside. This move offered an ideal intraday short opportunity with a manageable 50-point stop loss and a realistic 100-point target.
This price action once again reinforces the importance of trading with confirmation rather than anticipation.
Intraday Trading Strategy for Nifty Futures – 20 January 2026
For the upcoming session, traders should continue to focus strictly on levels and risk management.
On the short side, intraday selling should be considered only if Nifty Futures moves below the 25,500 level. Initiating shorts before this confirmation increases the risk of getting trapped in a false bounce. A stop loss of around 50 points should be maintained, with a minimum downside expectation of 100 points. If the 25,500–25,450 zone breaks decisively, the possibility of a sharper intraday fall increases significantly.
On the buy side, trades should be attempted only if genuine strength emerges. A long position makes sense only if Nifty Futures trades comfortably above the 25,680 level with stability. Even in this case, traders should maintain a strict 50-point stop loss and keep expectations realistic with a 100-point target, as the broader trend remains bearish.
Key Levels to Watch Going Forward
The immediate support for Nifty Futures lies near 25,500, followed by a critical breakdown zone between 25,500 and 25,450. On the upside, 25,680 remains an important resistance for intraday traders. A decisive move above the 25,800–25,900 zone is required to signal any meaningful revival in bullish momentum.
Final View: Discipline Over Prediction
The overall market structure currently remains bearish. The bullish trend has already broken, global uncertainty is high, and volatility is being driven by factors beyond pure fundamentals. In such an environment, respecting technical levels, managing risk carefully, and avoiding emotional decision-making becomes far more important than predicting market direction.
Sometimes, preserving capital is the most profitable strategy of all.
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Disclaimer
The views and analysis provided above are for educational and informational purposes only and should not be considered as financial or investment advice. Trading and investing in the stock market involve risk, and past performance does not guarantee future results.
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