Nifty has failed to cross the previous day's high for 12 straight trading sessions, the longest such streak on record. This creates an unusual setup for the market as investors weigh strong Q1 earnings against crude oil and global risks.
The streak began after Sebi introduced the Closing Auction Session, or CAS, in the market. According to Apurva Sheth, Head of Market Perspectives and Research at SAMCO Securities, the previous longest streak in Nifty's history was 9 consecutive sessions, making the current 12-session run unprecedented.
The index's failure to make a fresh daily high shows the market's reluctance to chase prices higher. But history suggests such phases have often been followed by a short-term recovery. Samco's study of similar episodes since 2010 showed average forward returns of 3.36% over five days, 2.51% over 10 days and 1.93% over 15 days.
That makes the next few sessions important for traders. The market has already absorbed most of the Q1 earnings season, which was better than feared. Corporate results have broadly beaten estimates, helping investors look past recent volatility.
Vinod Nair, Head of Research at Geojit Investments, said Q1 results have generally exceeded expectations and reinforced confidence in earnings resilience. However, he said the next phase of market performance will depend largely on the stability of crude oil supply chains as temporary market tailwinds fade.
The crude oil factor remains central because India is a large oil importer. Any fresh disruption in supply or sharp rise in prices can affect inflation, corporate margins, current account balances and foreign investor flows. A stable crude market, on the other hand, gives investors more room to focus on earnings growth and domestic liquidity.
The technical setup is also at a key point. Rupak De, Senior Technical Analyst at LKP Securities, said the Nifty has found support at the lower band of a rising channel. He said the index has also filled a gap on the daily chart, while the 61.8% Fibonacci retracement level has coincided with the same support area.
"The Nifty found support at the lower band of the rising channel. Besides, the index filled a gap on the daily timeframe. The 61.80% Fibonacci retracement level also coincided with these support levels, where the index made a low," De said.
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He said immediate support is placed at 24,000-24,050. If this zone holds, the Nifty could stage a meaningful recovery. But a break below 24,000 could increase bearish pressure and drag the index lower.
“Long positions should be held with a strict stop-loss at 24,000,” De said.
The market is therefore caught between two signals. On one side, the index has shown weak upside momentum by failing to make a higher daily high for 12 sessions. On the other, earnings have been resilient and historical data suggests that extended phases of suppressed upside can lead to a rebound.
Samco also noted that Nifty is taking support near a rising trendline, suggesting that the broader structure has not broken yet. The index may need a strong close above recent highs to confirm that the pressure from the lower-high streak is easing.
For investors, analysts say the key is to avoid reading the 12-day streak in isolation. The market is not dealing with weak earnings. It is dealing with hesitation after a period of volatility, policy changes around closing price discovery, and uncertainty around crude and global flows.
The Q1 earnings season has given support to the fundamental case for equities. But for the index to recover meaningfully, traders will look for Nifty to defend the 24,000 zone and break the pattern of lower highs.
