The Indian stock market traded with strong gains on Monday, extending its rally for the second session, led by strong buying across most sectors. Global market cues remain mixed as investors stay cautious amid uncertainty over the US-Iran peace talks as tensions escalated during the weekend.
The BSE Sensex jumped 419.40 points, or 0.53%, to trade at 78,912.94, while the NSE Nifty 50 was up 125.20 points, or 0.51%, at 24,480.00. The benchmark index touched an intraday high of 24,480.55.
“With the de-escalation and escalation drama in the West Asian conflict continuing, the market will remain volatile in the near-term,” said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments.
He noted a significant trend in the market now, which is the outperformance of the broader market. While Nifty Midcap and Nifty Smallcap indices are back to pre-war levels, the benchmark Nifty 50 is still 4% below pre-war levels.
“Market is responding positively to good results from the broader market space. Even with the uncertainty of the West Asia tensions weighing on the market, particular stocks will respond to good results, particularly when the results beat expectations,” said Vijayakumar.
Technical Outlook
Technically, Nifty 50 index hovers above the crucial resistance zone of 24,300 – 24,400, which remains a key hurdle for further upside. Analysts believe a sustained breakout above this range will be essential to strengthen bullish momentum and extend the rally towards the 24,800 – 25,000 levels.
Nifty 50 formed a bullish candle on the weekly charts. Additionally, the index is also trading comfortably above short-term averages, which also supports a further uptrend from the current levels.
On the options front, meaningful call writing witnessed across 24,500 and 24,600 strikes. On the put side, 24,400 has a substantial open interest, followed by 24300 strike. Nifty’s Advance Decline Ratio is at 32:18 and PCR is currently at 1.34.
Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities said that the Nifty 50 index witnessed strong traction from lower levels and carried forward the positive momentum witnessed in the past two weeks.
“Amidst strong market breadth, we expect 24,250 – 24,320 now to act as a support and Nifty 50 index can continue its upmove till 24,590 – 24,650,” said Shah.
On the downside, he believes if the Nifty 50 index slips below the level of 24,320 then the next support is placed in the zone of 24,170 – 24,150. In the event of a surge above 24,560, the index can experience an extension of the rally towards 24,700.
According to Ponmudi R, CEO of Enrich Money, immediate support for Nifty 50 is placed near the 24,240 zone which is 50 day EMA and if further support is broken, then selling pressure towards to the next support is seen at 24,000 , which will be important to maintain the current structure.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
