Trade Setup Today: NIFTY50 Fell Down

As investors considered President Donald Trump's proposed tariffs on steel and aluminum imports, US stock indices finished higher than typical on Monday. Nevertheless, despite initial worries, the markets demonstrated resilience, looking ahead to forthcoming policy changes and economic reports.

In addition, there remains uncertainty as markets brace for Trump’s expected announcement of reciprocal tariffs impacting all trading partners.

Investors are concerned that rising trade tensions could lead to higher inflation, thereby postponing any interest rate cuts. But this week's key economic statistics, particularly the January Consumer Price Index (CPI) on Wednesday and retail sales figures, will be widely watched for market direction.

Sensex

The SENSEX continued its decline for the fourth day in a row, dropping below the critical 21-day exponential moving average on a closing basis. The index formed a bearish candle on the daily chart and currently rests at the significant support zone of 77,100. Should the index fall below the highlighted support zone on a closing basis, it could escalate the weakness down to the 75,600 zone.

Nifty50

Following Donald Trump's latest tariff threats against steel, aluminum, and other imports, investor morale fell, prompting the market to close down on Monday. In response to the reports, the NIFTY50 index opened sluggishly and remained under selling pressure throughout the trading session. At the same time, market volatility soared, with the India VIX increasing 5.55% to 14.45, signaling investor anxiety.

On the daily chart, the index fell underneath the essential support level of the 21-day exponential moving average (EMA), erasing all the gains made during the budget week. This reflects ongoing weakness in market breadth, with strong resistance observed near the 23,800 level. Immediate support can be found around the 23,200 mark, and a close below this level could signal further downward pressure.