According to Rohit Srivastava of Indiacharts.com and Strike Money, the Indian stock market may be close to the end of its current sell-off, with sentiment and positioning indicators reaching extreme levels. "We are in a capitulation. We should be in the final stages," Srivastava said, noting that the current correction has spread from largecaps to midcaps and is now beginning to affect smallcap and microcap stocks. He identified two key support levels for the Nifty: the first around 22,180, which is close to the April low and also aligns with his Fibonacci calculations, and a deeper correction could take the index towards 21,780, implying another 1-1.5% downside. If that level fails to hold, he sees the next support near 21,780. Srivastava emphasized that "one of those levels, I think, somewhere is where we should see the last and final reversal to this sell-off." He noted that several sentiment indicators, including positioning, breadth and the number of stocks breaking key moving averages, have reached levels rarely seen before.
The Nifty 50 briefly slumped below the 22,200 mark on Thursday, extending its losing streak despite resilient domestic macroeconomic parameters. At 3:09 pm, Nifty was trading 1.84%, or 416.65 points, lower at 22,186.40, while the BSE Sensex declined 1.75%, or 1,273.5 points, at 71,365.2. The benchmark index had earlier dropped below 22,280 on Thursday, with the index now around 90 points above its 52-week low level of 22,183 as it breaches key technical levels amid soaring oil prices, persistent FII selling and other headwinds. The sharp selloff across frontline counters has worsened market sentiment, creating a stark divergence between India's fundamental economic health and equity price action. Latest data shows the Nifty 50 hit its lowest level since April 2025 on Thursday, sinking to 22,179, with the market experiencing a sharp selloff that wiped out more than ₹10 lakh crore from the total market capitalisation of companies listed on the BSE in just one day.
According to SBI Securities, the zone of 22,190 - 22,210 will act as a crucial support for Nifty 50 on the downside, while resistance lies in the zone of 22,500 - 22,520 on the upside. However, if the index falls below 22,190, SBI Securities sees it declining towards 22,040, while if the index manages to rebound and move beyond 22,520, it sees it rallying towards 22,670. The Nifty's technical undertone remains deeply fragile while prices hover below the 22,800 pivot level. A breach below the April low of 22,182 will signal extension of the decline. For a meaningful trend reversal, the index would require forming a sustained Higher High–Higher Low structure in the daily chart and reclaim the 23,000-23,100 level. The Nifty has now tumbled more than 4,100 points or 16% from its January all-time high level of 26,373, with the index having managed to remain above its April lows despite recent pressure. Going ahead, the zone of 22,350-22,400 is likely to act as an immediate hurdle for the index on the upside, according to recent analysis, with the analyst warning that as long as Nifty remains below the 22,400 mark, the prevailing bearish trend is expected to continue.
Srivastava expects the next confirmed reversal to lift the index towards 23,500-23,800 once the market confirms a reversal. He is avoiding fresh short positions because the market already appears stretched on the downside and is waiting for a clear reversal signal before taking long positions. "The next reversal point, wherever it is, could be a very important one," he emphasized. He noted that smallcap and microcap indices remain the final segments where the momentum cycle has not fully played out, and if these indices also complete the correction seen earlier in largecap and midcaps, the broader market sell-off could reach a conclusion. Srivastava expects the first leg of any recovery to take the Nifty back towards 23,500-23,800, although he stressed that he would wait for confirmation before entering trades. He pointed to developments in global bond and currency markets as key factors that could determine when the reversal begins. Domestically, stronger-than-expected Q2 earnings, resilient consumption and improving earnings visibility can provide fundamental support, according to Mishra from Religare Broking, who added that "the recent sharp correction has also improved valuations, but technically the market needs to build a durable base before a sustained rebound can take shape."
Multiple experts have identified attractive sectors for current market conditions. Shrikant Chouhan of Kotak Neo recommends banks, capital markets, diversified financials, consumer durables, EMS, healthcare, pharmaceuticals, hotels and restaurants, insurance, internet software and services, real estate, telecom, and transportation as sectors attractive at current levels. He estimates Nifty 50 earnings per share at ₹1,238 for FY27 and ₹1,416 for FY28, noting that at current levels, the index is trading at approximately 18.5 times FY27 and 16.1 times FY28 earnings. Narendra Solanki of Anand Rathi prefers auto and ancillaries, banks, power, defence, capital goods, new age stocks, metals (both ferrous and non-ferrous), and hospitals, while noting that IT, consumer, and FMCG are long-term positive but short-term neutral. Pankaj Pandey of ICICI Securities remains positive about the entire energy value chain, defence, and BFSI sectors, emphasizing that "for the markets to witness a sustainable run, crude oil prices and bond yields need to come down."
