1. February Series Trends
- Over the past few February series, Nifty has shown high volatility with large swings.
- The most notable move was in February 2021 (+1280 points, +9.3%), indicating a strong bullish trend.
- February 2022 saw a sharp decline (-862 points, -5%), reflecting market weakness.
- The last two February series (2023 and 2024) recorded moderate declines and gains, indicating mixed trends.
Key Takeaway:
- February has been a high-impact month, often marked by sharp movements.
- While three out of the last four February series ended positively, the 2022 decline of -5% shows downside risk.
2. January Series Performance
- Nifty declined by -501 points in the January series, marking the fourth consecutive negative January.
- Over the last four January series, Nifty has fallen by approximately -3000 points, reinforcing a seasonal weakness pattern.
Key Takeaway:
- January has been consistently bearish, indicating a strong historical trend of selling pressure.
- This could be due to global factors, FII activity, or pre-budget volatility.
3. Notable Nifty Down Moves in Past Series
- October 24, 2024: -2011 points (Major correction, possibly due to global macro events or policy changes).
- January 25, 2025: -501 points (Aligns with January’s historical weakness).
- November 24 & December 24, 2024: Smaller declines of -291 and -164 points, suggesting relatively stable months.
Key Takeaway:
- October historically has seen major corrections, suggesting caution in that month.
- The pattern of declining January series may influence sentiment going into February.
Market Outlook & Key Considerations
Historical data suggests:
- January is typically weak, while February can be volatile with large moves (both up and down).
- If the trend holds, February 2025 may see strong movement, potentially driven by budget impact, FII positioning, and global market trends.
- Traders should watch for early signs of trend reversals or continuation patterns to align strategies accordingly. Bearish Signs:
- FIIs maintaining a high short position signals lack of confidence in upside momentum.
- Continued weakness across multiple series raises caution for further downside risk.
Bullish Catalyst Possibility:
- If there’s no major negative event (Budget surprises, global risks), the high FII short exposure could trigger a sharp short-covering rally.
- A strong rebound could come if key resistance levels are breached, forcing FIIs to unwind shorts.
Trading Strategy & Risk Management
- Watch for early signs of reversal if FIIs begin reducing shorts.
- High volatility expected due to heavy OI and rollover data.
- Critical Levels to Watch: Resistance at 23,150 / 23,400; Support at 22,850 / 22,666.