The January series has dusted us with a sharp decline of over 750 points, leaving traders bruised and wary. As we step into February 2026, the sentiment is fragile, but history suggests we are entering a period of high impact.
February is notoriously volatile. It is the month of the Union Budget, and historically, it is known for decisive moves. The street wisdom for February is simple: The bias often leans to the downside, but when February sees gains, they are massive.
With the Union Budget scheduled for this Sunday (Feb 1) and a pivotal RBI policy following closely, volatility isn’t just expected—it is guaranteed.
The “Big Move” Potential
A look at historical data confirms the “all-or-nothing” nature of the February series. It rarely stays flat.
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Bullish Case: If the Budget delivers, we could see a repeat of Feb 2021 (+9%).
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Bearish Case: If the triggers disappoint, the trend from Jan (Clients trapped long) could accelerate downside momentum.
Historical Nifty Performance – February Series
| Year | Change (Points) | Change (%) | Trend |
| Feb 2021 | +1280 | +9% | 🚀 Big Bull |
| Feb 2022 | -862 | -5% | 🐻 Bearish |
| Feb 2023 | -381 | -2% | 📉 Weak |
| Feb 2024 | +630 | +3% | 📈 Moderate |
| Feb 2025 | -705 | -3% | 🐻 Bearish |
📉 The January Hangover
The Jan 2026 series was brutal for bulls.
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Jan Series: -763 Points
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Dec Series: +54 Points
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Nov Series: -51 Points
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Oct Series: +1325 Points
We have effectively erased the consolidation of Nov-Dec. The index is now searching for a structural bottom.
⚡ Key Triggers for February 2026
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Union Budget (Feb 1): This is the immediate trigger. With the event falling on a Sunday, expect a gap opening on Monday that could define the trend for the entire first half of the series.
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RBI Policy (Feb 4-6): The street is pricing in a possible 0.25% rate cut to support growth. Any hawkish surprise here could spook the market further.
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Earnings Tail: The last leg of Q3 earnings will keep stock-specific volatility high.
📊 Data Dive: The “Trap” Setup?
The most interesting data point for Feb 2026 is the extreme divergence between FIIs and Retail Clients.
FII Exposure in Index Futures (Oversold?)
FIIs are entering the series with historically low long exposure.
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Feb ’26 Start: 12% Long (Extreme Pessimism)
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Jan ’26 Start: 9% Long
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Dec ’25 Start: 15% Long
Analysis: FIIs are net short ~1.75 Lakh contracts. This level of bearishness (12% long) is often a contrarian buy signal. If the Budget is positive, a massive Short Covering Rally could be triggered as FIIs rush to cover.
Client (Retail/HNI) Exposure (Trapped?)
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Client Long Exposure: 73%
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Net Contracts: +1.26 Lakh Longs
Analysis: Retail traders are heavily long, likely catching falling knives during the Jan drop. If the market breaks lower post-Budget, these long positions will be forced to unwind, fueling a sharper fall.
🔄 Rollover Analysis
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Rollover Rate: 70.7%
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Previous (Jan): 72.3%
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3-Month Avg: ~75.7%
Inference: Rollovers are below average.
This indicates that many traders booked losses or exited positions rather than carrying them forward. The lighter open interest base (1.62 Cr shares vs 3-month avg context) allows the market to move freely in either direction without the burden of heavy legacy positions.
The Game Plan
The setup for Feb 2026 is a classic “Springboard or Trap.”
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FIIs are light: They have room to buy if triggers are positive.
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Clients are heavy: They are the weak hands if support breaks.
Strategy: Watch the reaction to the Budget on Feb 2nd. If Nifty sustains the Sunday gains/losses, follow the trend. Do not preempt the move—Feb series does not forgive anticipation errors.
Trade Safe & disciplined.
Awesome analysis