Indian stock market benchmarks, the Sensex and Nifty 50, are positioned for a positive opening on Thursday, mirroring upbeat trends in global markets. This optimistic sentiment is further supported by the Gift Nifty, which was trading at a premium, indicating a strong start for the domestic indices.
Market Recap and Immediate Outlook
On Wednesday, the domestic equity market witnessed a robust rally, closing sharply higher. The Sensex surged by 1,022.50 points, or 1.21%, to settle at 85,609.51. Similarly, the Nifty 50 jumped 320.50 points, or 1.24%, to close at 26,205.30, decisively moving past the 26,200 mark.
According to Shrikant Chouhan, Head of Equity Research at Kotak Securities, the Sensex has formed a promising reversal pattern on daily charts. "For trend-following traders now, 85,000 and 85,300 would act as key support zones. As long as Sensex is trading above these levels, the bullish formation is likely to continue," he stated. He identified 86,000 - 86,200 as immediate resistance levels, warning that a fall below 85,000 could make the uptrend vulnerable.
Echoing this view, Market Analyst Mayank Jain from Share.Market highlighted that the 85,800 – 86,000 region is the next major resistance. A decisive breakout above this zone could potentially open the doors to fresh record highs for the index, with support seen near 85,100 – 85,000.
Nifty 50 and Bank Nifty Technical Analysis
The Nifty 50's performance has been particularly noteworthy. Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, pointed out that the index formed a long bull candle that nearly engulfed the price action of the previous four sessions. "This is a positive indication and signals that the market is likely to zoom into new all-time highs soon," Shetti remarked. He believes that Nifty 50 could reach 26,300 and 26,500 levels in the near term, with immediate support at 26,050.
Derivatives data for Nifty revealed strong call writing at the 26,000 strike, while the maximum put open interest was at 25,800, indicating firm demand at lower levels. Hitesh Tailor, Research Analyst at Choice Equity Broking, emphasized that a sustained close above 26,000 is crucial to revive bullish momentum for further upside.
Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, identified the 26,270 – 26,300 zone as a critical resistance for the Nifty 50. A sustained move above 26,300 could trigger a fresh rally towards 26,500 and even 26,700, he suggested.
Banking Index Shows Strength
The banking sector index, Bank Nifty, also participated in the Wednesday rally, climbing 707.75 points, or 1.20%, to end at 59,528.05. The formation of a big bullish candle on the daily chart signifies underlying strength.
Hrishikesh Yedve, AVP of Technical and Derivative Research at Asit C. Mehta Investment Intermediates Ltd., stated that as long as the Bank Nifty holds above 59,400, the rally could extend towards the 60,000 mark. He advised short-term traders to adopt a buy-on-dips strategy.
Ponmudi R, CEO of Enrich Money, noted that the index consistently held 59,400 as intraday support. He believes a decisive close above 60,000 can unlock the next rally towards 61,000, with a solid support zone existing between 59,000 and 58,841.
Overall, the sentiment across the Indian equity market remains cautiously optimistic. With supportive global cues and strong technical setups, the indices are well-positioned for a potential upward move, though traders are advised to monitor key support and resistance levels closely.
