The Indian stock market has witnessed a remarkable surge, with the Nifty index climbing 4.48% during a holiday-shortened week, concluding at 23,851 on Thursday. This impressive uptick represents the highest weekly percentage increase since February 5, 2021. As we analyze the recent performance, it’s essential to reflect on the events that unfolded over the past two weeks.

Market Fluctuations and Recovery

The market experienced a significant downturn on April 7, coinciding with the reopening of Chinese markets after their Lunar New Year break. The Nifty saw a sharp decline of 1,161 points from its closing value on April 4. However, after this initial dip, the index embarked on a remarkable recovery, rallying from a low of 21,743 to gain 2,108 points, ultimately closing at 23,851. This positions the Nifty 947 points above its April 4 closing figure.

• Key points:
  • April 7 low: 21,743
  • April 4 close: 22,904
  • Current close: 23,851

Factors Driving the Rally

Multiple factors contributed to this resurgence, with discussions surrounding tariffs being a significant driver. Additionally, the Reserve Bank of India’s (RBI) accommodating policies bolstered market confidence, coupled with a strengthening currency.

Analyzing the Trendline

Looking at the daily candlestick chart, one can observe trendline number 51, which connects the highs of 23,807 from February 5 and 23,869 from April 25. The last trading session saw the Nifty touch a high of 23,872. The upward sloping nature of trendline number 51 indicates a potential asking level of 23,896 for the upcoming Monday. If this level is convincingly surpassed on a closing basis, it could establish a new support level for the index.

Indicators of Future Growth

On April 7, despite hitting an intraday low of 21,743, the Nifty managed to close at 22,161, suggesting a strong recovery. When plotted, this creates an inverted head and shoulders pattern, with the April 7 close representing the right shoulder. This technical formation opens the door for the Nifty to potentially revisit levels around 25,650.

Gaps in the Market

It’s important to note that the Nifty’s recent rally has resulted in several gaps that may need to be filled. These gaps could serve as support if the market decides to take a breather. The most significant gap lies between 22,923 (the high on April 11) and 23,207 (the low on April 15).

Bank Nifty Performance

Meanwhile, the Bank Nifty narrowly missed reaching its all-time high, falling short by a mere 60 points or 0.1%. Several Nifty constituents within the financial and telecommunications sectors have achieved new highs. As foreign institutional investors (FIIs) recognize that India’s exports to the U.S., as a share of GDP, are substantially lower than those of other emerging markets, the appeal of India as a favorable investment destination continues to grow.

In summary, the recent performance of the Nifty reflects a dynamic market landscape, characterized by recovery and potential growth. Investors should remain vigilant as they navigate these developments in the Indian capital market.