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The market remains in a volatile, range-bound phase following the Budget 2026 announcements. Investors should maintain a cautious stance this week, as a sustainable recovery depends on upcoming global data and clarity on domestic fiscal triggers.

Buy above ₹1900, stop ₹1840, target ₹2015 (Multiday)

Buy above ₹941, stop ₹898, target ₹1080 (Multiday)

Buy above ₹370, stop ₹354, target ₹398 (Multiday)

On 2 February, Indian equity benchmarks staged a sharp rebound, recovering part of the steep losses from the Budget-day slump, with the Nifty closing just above 25,000. In a volatile session tracking mixed global cues, the indices opened lower and remained range-bound through the first half, before strong buying in heavyweights such as Reliance, Adani Ports, and ICICI Bank lifted sentiment in the latter part of the day.

The Sensex surged 944 points or 1.17% to 81,666.46, while the Nifty advanced 263 points or 1.06% to close at 25,088.40. The broader market also rebounded, with the Nifty Midcap gaining 1% and the Smallcap index rising 0.6%. Despite the bounce, the overall trend remains cautious, as the Nifty continues to trade below its 200-DMA, keeping sentiment weak. Immediate resistance is seen at 25,200, while support lies near 24,900, suggesting that rallies may still be used to lighten leveraged positions.

The 'knee-jerk' volatility following the Budget has left the market tentative. Monday’s recovery is a positive sign, but it shouldn't be mistaken for a trend reversal just yet. With the market still digesting the F&O STT hike and higher government borrowing, a cautious, level-based trading approach is recommended for the rest of the week.

Nifty Bank’s resilience amid broader market volatility suggests it remains the primary engine for any potential recovery. While overall cues are sparse, the index's ability to hold its ground—supported by RBI’s timely intervention to stabilize the Rupee—is a positive signal. Investors are now closely watching the upcoming RBI Monetary Policy for liquidity measures that could further extend this recovery trend.

Tuesday’s strategy centers on a 30-minute opening range breakout. Given the current lack of momentum, traders should play both sides but maintain tight stop-losses and quick profit-taking. Option data confirms a cautious floor with a PCR of 0.82, but aggressive Call writing at 25,300–25,500 for Nifty and 59,000 for Bank Nifty acts as a firm ceiling, likely stalling any major recovery attempts for now.

Raja Venkatraman is co-founder, NeoTrader. His Sebi-registered research analyst registration no. is INH000016223.

Investments in securities are subject to market risks. Read all the related documents carefully before investing. Registration granted by Sebi and certification from NISM in no way guarantees performance of the intermediary or provide any assurance of returns to investors.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.

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