The Indian stock market is poised for a promising start this Monday, driven by positive sentiment from both domestic and global fronts. The recent announcement of a ceasefire between India and Pakistan, coupled with a trade agreement between the U.S. and China, has sparked optimism. The Nifty 50 and Sensex indices are expected to open higher, with trends from the Gift Nifty suggesting a gap-up of approximately 475 points.

Market Highlights

• Gift Nifty is showing strong momentum, trading at around 24,541, indicating a bullish outlook.
• The announcement of a “bilateral understanding” to stop military actions between India and Pakistan has eased tensions, with Air Marshal AK Bharti stating that Operation Sindoor successfully met its objectives.

Previous Market Performance

On Friday, the Indian markets faced a downturn, attributed to escalating tensions between India and Pakistan. The Sensex fell by 880.34 points (1.10%), closing at 79,454.47, while the Nifty 50 dropped by 265.80 points (1.10%) to close at 24,008.00.

Sensex Analysis

The Sensex experienced a significant decline of 1,047 points last week, developing a long bearish candle on its weekly chart. It is currently hovering near a critical support level of the 200-day Simple Moving Average (SMA).

• Resistance Level: The index faces resistance at 79,900.
• Support Levels: A drop below this could retest 78,800, and further declines may see it slip to 78,200.
• Potential Upside: A movement above 79,900 could signal a recovery, with targets aiming for 80,500 – 80,800.

Nifty 50 Insights

The Nifty 50 has shown considerable weakness, particularly following the events on May 9, where it closed down by 265 points amid volatility.

• Current Trends: A small bullish candle formed at the lows indicates an attempt to break out from the current range.
• Support Levels: Strong support is expected around 23,800 – 23,600, which aligns with the weekly EMA.
• Resistance Levels: Immediate resistance is at 24,200.

Om Mehra, a Technical Research Analyst at SAMCO Securities, emphasizes that the index is currently at the 23.6% Fibonacci retracement level near 23,910. A break below 23,800 could lead to a deeper decline toward 23,500.

Bank Nifty Forecast

The Bank Nifty also faced challenges, falling by 770.40 points (1.42%) to settle at 53,595.25.

• Current Status: The index closed below both the 9-day and 20-day EMAs, indicating a bearish trend.
• Support Levels: Key support is seen around 52,900, which corresponds with the 61.8% Fibonacci retracement level.
• Resistance Levels: The 54,000 – 54,200 range continues to act as a formidable barrier.

Puneet Singhania, Director at Master Trust Group, advises traders to maintain caution and consider a sell-on-rise strategy amidst the prevailing volatility.

Conclusion

As the markets prepare to open, investors are advised to stay informed and consider strategic hedging to navigate potential fluctuations. The recent developments provide a mix of cautious optimism and prudent trading opportunities. The market’s direction will largely depend on how these geopolitical factors evolve in the coming days.