The NIFTY 50 enters 2026 at elevated levels, trading above the 26,000 mark. After a strong 2025, investors are asking: what does technical analysis suggest for the first quarter? Let's examine the key levels and patterns.
Current Technical Setup
The index is trading above all major moving averages (20, 50, 100, and 200 DMA), indicating a strong bullish trend. However, RSI readings suggest caution—the 14-day RSI is hovering near overbought territory at 68.
Key Support and Resistance Levels
- Immediate Support: 25,800 (20 DMA)
- Strong Support: 25,200 (50 DMA and previous breakout zone)
- Major Support: 24,500 (100 DMA)
- Immediate Resistance: 26,500 (psychological level)
- Major Resistance: 27,000 (all-time high territory)
Sector Rotation Signals
Relative strength analysis shows IT and Banking sectors leading, while FMCG shows relative weakness. This rotation pattern typically occurs in late-cycle bull markets. Traders should consider sector-based positioning rather than broad market exposure.
Trading Strategy for Q1
Given the technical setup, we suggest a cautiously bullish stance with defined risk management. Buy on dips toward 25,800 with stops below 25,200. Take partial profits at new highs. Avoid chasing momentum at current levels.