The recent market crash is examined through the lens of Elliott Wave theory, indicating it was not just a random event. Key points include the technically-driven actions of the Nifty and Bank Nifty, showing they were not purely incidental. The “STT Shock” is investigated to clarify its predictable nature in market charts. Analysts are questioning if the recent price rebound might be misleading, by distinguishing between impulsive and corrective structures.

Critical Support Zones

For ITC, critical support levels are found between 410 and 450, based on Wave 5/ABC scenarios. Waaree Energies is analyzed with a focus on support around 2400 to 2500, suggesting that caution is needed before taking a bearish position. The analysis also looks at potential market trends, including sell-offs in gold and silver. Discussions continue about the weak Australian dollar and fluctuating oil prices due to geopolitical tensions, especially noting interventions in the USD/INR that favor its rise. Editor’s picks feature movements in EUR/USD and GBP/USD, alongside a market dip in bitcoin. Recommendations for top brokers in 2026 are also included. This information is for educational purposes, reminding readers of the risks involved and the importance of doing thorough research before making any financial decisions.

Market Trends and Strategy

The recent crash, spurred by the STT shock, was a technical occurrence we anticipated from the charts, rather than mere bad luck. The sharp decline in the Nifty 50 during January 2026 caused the India VIX to rise above 25, signaling a level of fear not seen since the uncertainty of the 2025 general elections. This suggests that high volatility will likely continue in the following weeks. We see the current bounce in the Nifty and Bank Nifty as a potential trap or a corrective wave, not the start of a new, sustainable rally. For derivatives traders, this means using any surge to cautiously build short positions, such as buying puts or selling out-of-the-money call spreads. The market structure indicates another downward move is more likely than reaching new highs. This bearish outlook is supported by the ongoing strength of the US dollar, which puts stress on emerging markets. Reflecting on 2025, we observed how a rising dollar led to significant capital withdrawal from Indian equities. Recent data for January 2026 shows this pattern repeating, with foreign investors removing over $3 billion from the cash market. The ongoing sell-off in gold and silver indicates a risk-off mentality, where traders are favoring the safety of the US dollar. Gold’s failure to maintain crucial support levels, despite geopolitical issues that should normally strengthen it, serves as a crucial warning for risk assets. This reinforces our cautious approach toward the broader market indices. In terms of specific stocks, ITC is testing a key support level between 410 and 450. If it fails to maintain this range, it could see a sharper decline, making protective puts a viable strategy. Similarly, Waaree Energies needs to hold its 2400-2500 support to avoid a more significant correction. Currently, exercising patience is the best strategy before becoming aggressively bearish. Implied volatility is high, making option premiums costly for buyers. We will watch for this bounce to lose steam before establishing larger short positions through index futures and puts, aimed for late February and March expiries. Create your live VT Markets account and start trading now.

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