Political Stability Fuels Market Optimism
The Indian stock market is gearing up for a positive opening on Monday following the decisive victory of the BJP-led NDA in the Bihar elections. This political outcome has significantly improved investor sentiment regarding the stability of the coalition government at the Centre, creating favorable conditions for market growth.
The Gift Nifty was trading around 26,005 level, showing a premium of nearly 54 points from the Nifty futures' previous close, indicating strong bullish momentum in early trading sessions.
Friday's Market Performance Sets Stage
On Friday, the Indian equity markets closed in positive territory, with the benchmark Nifty 50 settling above the crucial 25,900 level. The Sensex gained 84.11 points, or 0.10%, to close at 84,562.78, while the Nifty 50 added 30.90 points, or 0.12%, ending at 25,910.05.
For the week, both indices posted impressive gains, with Sensex rallying 1.62% and Nifty 50 climbing 1.64%, forming bullish patterns on the weekly charts that suggest sustained buying interest among investors.
Technical Outlook and Key Levels
According to Amol Athawale, VP Technical Research at Kotak Securities, the uptrend is likely to continue as long as Sensex maintains above the 20-day SMA or 84,000 level. Immediate resistance zones are seen at 84,900 and 85,200, with potential for the index to reach 85,800-86,400 if it successfully breaks above 85,200.
Market Analyst Mayank Jain from Share.Market highlighted that technical support for Sensex is positioned around 83,900-84,000, while sustained movement above 84,800-85,000 could trigger renewed bullish momentum.
In the derivatives segment, Hardik Matalia, Derivative Analyst at Choice Equity Broking, noted that maximum Call Open Interest is placed at 26,000 strike, followed by 26,100, indicating resistance at higher levels. The maximum Put OI concentration at 25,900-25,800 strike range marks key support zones.
Nifty 50 and Bank Nifty Projections
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, observed that Nifty 50 formed a long bull candle on the daily chart, suggesting an excellent comeback by bulls from near the supports. The weekly pattern signals a 'rising three method' formation, which typically indicates uptrend continuation.
Puneet Singhania, Director of Master Trust Group, emphasized that Nifty 50 continues to trade above the 21-day and 55-day EMAs, reaffirming strength in the ongoing uptrend. The RSI reading of 62 indicates healthy buying momentum, with resistance seen around 26,100 and support between 25,650-25,700.
Bank Nifty showed strong performance, closing at 58,517.55 on Friday with a weekly gain of 1.11%. Hrishikesh Yedve from Asit C. Mehta Investment Intermediates Ltd noted that Bank Nifty has formed a Bullish Marubozu on the daily chart, signaling strong bullish momentum. Immediate support is seen near 58,050, while resistance is placed around 58,615.
Sudeep Shah from SBI Securities added that Bank Nifty is trading at record levels with all major moving averages aligned upward, suggesting a robust bullish trend. The zone of 58,700-58,800 will act as key resistance, with potential for rally towards 59,500 upon sustained breakout.
Market Strategy and Outlook
Technical analysts recommend maintaining a buy-on-dips strategy given the overall bullish market structure. The political stability indicated by the Bihar election results, combined with positive technical setups, creates an encouraging environment for medium-term investment outlook.
Investors should monitor key resistance and support levels while being cautious of any unexpected political developments that might impact market sentiment. The current setup suggests limited downside risk as long as indices maintain above their crucial support zones.
