Trade Setup for Feb 9: Market to closely track the contours of the India–US trade agreement

Nifty’s recent dips are being bought into, signalling underlying strength. With support firm near 25,500, traders now eye cues from the India–US trade deal details, Wall Street’s rebound, and key resistance levels that could decide the index’s next directional move.

The Nifty may begin the new week on a constructive note as improving global cues and clarity around the India–US trade deal provide potential triggers for upward momentum. Although the index remains over 650 points below last Tuesday’s peak of 26,341, recent price action indicates that buyers are stepping in on declines, reinforcing the 25,500 level as a crucial support zone.

A sharp intraday recovery of nearly 200 points from the day’s lows in the previous session highlighted two key trends: bulls are actively defending the 25,500 mark, and heavyweight stocks continue to provide stability despite resistance at higher levels. The Nifty’s ability to end near the day’s high after briefly slipping below support signals resilient sentiment, even as broader charts still show a pattern of lower highs and lower lows. For a sustained uptrend, this pattern will need to be decisively reversed.

Market participants will closely track the contours of the India–US trade agreement, released over the weekend, which remove a layer of uncertainty around bilateral trade expectations. Additionally, Wall Street’s rebound on Friday could offer relief to Indian IT stocks, which recently endured their weakest week in four months. Together, these factors may help the Nifty attempt a push towards overhead resistance.

On the upside, traders are watching Thursday’s high of 25,757 and Wednesday’s high of 25,818 as the first hurdles. Beyond these, the 26,000 level stands out as a psychological and technical barrier that could determine the index’s near-term trajectory. A decisive breakout above this level may open the path toward the 26,350 zone. On the downside, 25,500 remains the key support; a breach could shift sentiment more cautiously.

Technical analysts largely see the index in a consolidation phase. According to market experts, the Nifty is currently moving within a tight range of 25,500–25,700. A breakout beyond either boundary could trigger a stronger directional move. Some analysts also note that a partially filled upside gap from early February could evolve into a bullish runaway gap if it holds, reinforcing the case for a move above 25,800.

Banking stocks continue to lend strength. The Nifty Bank index has closed above 60,000 for four straight sessions, demonstrating resilience even during intraday declines. Immediate resistance is seen in the 60,300–60,400 zone, while sustained strength above this area may lead to targets near 60,800 and 61,200. On the downside, the 59,700–59,600 region, near the 20-day EMA, is expected to provide support.

With the earnings season nearing its end, upcoming results from major index constituents such as Hindalco and ONGC could also influence sentiment. Until clearer directional cues emerge, traders may continue to adopt a buy-on-dips strategy while closely monitoring key technical levels.