According to CLSA's technical analyst Laurence Balanco, India's stock market is showing early signs of a cyclical bottom, with the Nifty 50 approaching a major support zone. As reported by NDTV Profit, Balanco stated that the combination of major support levels, improving momentum and a potential double-bottom formation warrants a more constructive tactical stance on Indian equities. The technical analysis suggests that India could also be forming a relative bottom against the broader emerging-market benchmark, with double-bottom structures in the US-listed India-focused exchange-traded fund (INDA) reinforcing the possibility of stabilisation in both absolute and relative terms.
The Nifty 50 is attempting to establish a base around 21,700-22,182, which marks the lower boundary of its trading range since 2024. According to Balanco's analysis, the first resistance for the Nifty 50 stands at 23,070. Beyond this level, the index faces a crucial resistance zone between 23,654 and 24,183, where its 50-day and 200-day moving averages converge. As reported by NDTV Profit, a sustained break above these moving averages would provide stronger confirmation that the market is transitioning from a consolidation phase into a renewed cyclical rally. The analyst emphasized that CLSA's broader global market assessment highlights the importance of macroeconomic conditions, including inflation, Federal Reserve policy, bond yields, earnings expectations and geopolitical risks, in determining whether a sustained recovery materialises.
September-October price and momentum divergence suggests that the decline from the August highs is becoming mature and increasingly vulnerable to a reversal. According to Balanco's technical analysis, this could set the stage for another cyclical rally within the broader trading range of 21,700-22,182 on the downside and 26,000-26,300 on the upside. The analyst pointed to a potential double-bottom formation around the July and October relative lows, with additional support from levels last seen in 2020. For Indian equities, the immediate focus remains on whether the Nifty can hold its major support zone and subsequently overcome resistance around its key moving averages. A successful breakout could strengthen the case for a broader cyclical recovery.
The emerging technical formation suggests India could also be forming a relative bottom against the broader emerging-market benchmark. As reported by NDTV Profit, double-bottom structures in the US-listed India-focused exchange-traded fund (INDA) and its relative performance against the emerging-market benchmark reinforce the possibility of stabilisation in both absolute and relative terms. Balanco noted that the technical indicators suggest that the recent selloff could be nearing exhaustion, similar to opportunities observed around the March 2025 and April 2026 lows. The analyst emphasized that CLSA's broader global market assessment highlights the importance of macroeconomic conditions in determining whether a sustained recovery materialises.
