On Wednesday, the Indian stock market is poised for a promising start, fueled by an upswing in global markets. The positive sentiment is echoed in the trends from the GIFT Nifty, indicating that the benchmark index may open higher. Currently, GIFT Nifty is trading around the 24,375 mark, reflecting a premium of approximately 206 points over Nifty futures’ previous close.
Global Market Influence
A significant rebound occurred in the U.S. stock market, driven by President Donald Trump’s remarks about not dismissing Fed Chair Jerome Powell. This, along with rising optimism regarding the de-escalation of the U.S.-China trade tensions, has contributed to a bullish atmosphere. On Tuesday, Indian indices extended their upward momentum for the sixth consecutive session, with the Nifty 50 closing above 24,100.
- Sensex gained 187.09 points (0.24%), finishing at 79,595.59.
- Nifty 50 recorded an increase of 41.70 points (0.17%), closing at 24,167.25.
Sensex Outlook
Following a rise of 187 points to end at 79,596, the Sensex has formed a small bearish candle on daily charts, indicating a standoff between buyers and sellers.
- Key support levels for Sensex are identified at 79,400 and 79,000.
- Resistance is anticipated between 79,800 and 80,000.
According to Shrikant Chouhan, Head of Equity Research at Kotak Securities, while the market remains bullish, it is showing signs of being overbought. A drop below 79,000 could shift market sentiment, prompting traders to reconsider their long positions.
Nifty 50 Analysis
The Nifty 50 closed at 24,167.25, marking a modest gain and forming a Doji candle, which suggests indecision and a potential pullback after recent gains.
- Immediate resistance is set near the 24,250 level, while support is identified at 23,950.
- A decisive move above 24,270 could reinforce the bullish trend, according to Om Mehra, a Technical Research Analyst at SAMCO Securities.
Hrishikesh Yedve from Asit C. Mehta Investment Intermediates Ltd. noted that the index continues to hold above its 200-Day Simple Moving Average (200-DSMA), emphasizing the strength of the overall market structure.
Bank Nifty Insights
The Bank Nifty also showed positive momentum, closing up by 342.70 points (0.62%) at 55,647.20. This marks its sixth consecutive day of gains.
- The index is nearing a critical resistance area around 56,300, which aligns with the 127.8% Fibonacci extension level.
- A breakthrough above this threshold could signal further bullish movement.
Om Mehra cautioned that while Bank Nifty is experiencing a strong uptrend, any potential pullback should be viewed as a typical pause rather than a reversal.
Key Takeaways for Traders
Investors should remain vigilant and consider the following:
- Nifty Support Levels: 24,040 and 23,950
- Nifty Resistance Levels: 24,260 and 24,450
- Bank Nifty Support: 54,470
- Bank Nifty Resistance: 56,000
As the market navigates through potential fluctuations, a buy-on-dip strategy may be more prudent than aggressive selling, especially with the upcoming monthly expiry.
For those trading in index options, implementing neutral hedging strategies can help manage risks effectively during this volatile period.
By staying informed and strategic, traders can better position themselves to capitalize on market movements while safeguarding their investments.
