The Indian stock market is gearing up for a bullish start to the trading week, with benchmark indices Sensex and Nifty 50 expected to open significantly higher on Monday. This optimistic momentum is primarily driven by the release of India's stronger-than-anticipated GDP growth figures for the second quarter, which have injected fresh confidence among investors.
Market Drivers and Technical Outlook
The trends on Gift Nifty, which was trading around the 26,530 level—a premium of nearly 143 points from the Nifty futures' previous close—strongly indicate a gap-up opening for the domestic market. This comes after a subdued session on Friday where the market ended marginally lower. The Sensex had eased by 13.71 points to close at 85,706.67, while the Nifty 50 settled 12.60 points lower at 26,202.95.
From a technical perspective, the Sensex has formed a promising reversal pattern on both daily and intraday charts. It is also maintaining a higher bottom formation, which is largely viewed as a positive signal. For the past week, the index managed to gain 0.56%.
Amol Athawale, Vice President of Technical Research at Kotak Securities, stated, "We are of the view that the short-term market outlook is positive and uptrend formation is likely to continue in the near future." He identified 85,300 and 85,000 as key support zones for positional traders. On the higher side, he believes the uptrend could continue till 86,100, with further potential to lift the Sensex to 86,500 - 86,800. However, a fall below 85,000 could make the uptrend vulnerable, potentially leading to a retest of 84,500 - 84,300 levels.
Nifty 50 and Derivatives Analysis
The Nifty 50 formed a small negative candle on the daily chart last Friday. For the week, the index rose 0.52%, forming a small candlestick on the weekly chart that indicates some hesitation at higher levels.
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, noted, "Technically, this signals continuation of choppy movement in the market after a stellar rally on Wednesday." He believes the underlying uptrend of Nifty 50 remains intact and the present choppy movement could eventually result in another sharp breakout. Shetti sees the near-term upside target around 26,600 with immediate support placed at 26,050.
The derivatives data reinforces a bullish undertone. Ponmudi R, CEO of Enrich Money, highlighted, "Cumulative Put Open Interest (OI) remains higher than Call OI, confirming strong positional support near the 26,000 zone." Heavy Put buildup between 26,000 – 26,100 has strengthened the downside base, while consistent Call writing at 26,300 – 26,500 is creating a firm supply band on the upside.
Bank Nifty and Sectoral Performance
The Bank Nifty index ended 15.40 points higher at 59,752.70 on Friday, forming a doji candle on the daily chart which signals a potential pause before the next leg higher. The index rallied 1.5% last week and formed a strong bullish candlestick on the weekly chart.
Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, commented, "Momentum indicators across daily, weekly, and monthly charts remain firmly in the bullish camp." He noted that the RSI is rising within the super-bullish zone and the index's weekly close above the upper Bollinger Band underscores the power of this rally. Shah believes Bank Nifty appears well-positioned to climb toward 60,300 and then 61,000, with support placed at 58,800 – 58,700.
Ravi Singh, Chief Research Officer from Master Capital Services Ltd., suggested that buying on dips remains the preferred approach for Bank Nifty given the solid technical structure. He recommended initiating fresh long positions around 59,400 – 59,300, with crucial support at 58,800 acting as a protective stop-loss.
While the overall sentiment remains positive, analysts advise caution at elevated levels. Nilesh Jain, Head of Technical and Derivatives Research Analyst at Centrum Broking Ltd., pointed out that the 21-DMA support at 25,890 remains crucial for Nifty 50. As long as the index holds above this level, the broader uptrend is likely to persist. However, he cautioned against chasing the index at current levels due to an unfavorable risk-reward setup, suggesting waiting for a healthy pullback to initiate fresh positions.
