Indian equity markets witnessed a positive close on Monday, with both the Sensex and Nifty 50 indices showing significant gains. Analysts point to bullish reversal formations on technical charts, indicating potential for further upside, though immediate resistance levels remain a concern.
The BSE Sensex closed at 77,303.63, up 639.42 points (0.83%), while the Nifty 50 settled at 24,092.70, rising 194.75 points (0.81%). Despite these gains, market experts maintain a cautious optimism, citing ongoing geopolitical tensions in the Middle East as a potential ceiling for a sustained bull run.
Sensex Outlook: Pullback Rally Expected
According to Aakash Shah, Research Analyst at Choice Equity Broking, the overall Sensex structure suggests a pullback rally within a range-bound trend, with short-term momentum improving. However, a decisive breakout above the 77,900-78,000 resistance range is crucial for confirming a sustained uptrend. Conversely, failure to hold the 76,500-76,700 support zone could lead to further consolidation.
Shrikant Chouhan, Head Equity Research at Kotak Securities, noted, "For day traders, 77,000 and 76,700 would act as crucial support zones. As long as the market is trading above these levels, the bullish sentiment is likely to continue. On the higher side, the index could move up to 77,700, potentially extending to 78,000." He added that a move below 76,700 would make the uptrend vulnerable.
Nifty Outlook: Bulls Eye Higher Bottoms
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, observed a long bull candle on the daily Nifty chart, indicating an 'inside day' pattern. This suggests a potential comeback for bulls after a recent downward correction. Shetti also highlighted the formation of higher tops and bottoms on the daily chart, with Friday's swing low of 23,813 now considered a new higher bottom.
Rupak De of LKP Securities indicated that Nifty faced resistance near the 38.20% Fibonacci retracement level of its previous fall. "Going forward, the index might continue to face resistance at 24,115–24,150. A decisive move above 24,150 is required to witness a sustained rally towards higher levels. On the lower end, support is placed at 24,000, below which weakness might increase," De explained.
Macro Environment and Future Drivers
Vikram Kasat, Head Advisory at PL Capital, emphasized that while midcaps and smallcaps are experiencing 'risk-on' sentiment, the trajectory for large-cap stocks will likely depend on upcoming Q4 earnings and any de-escalation of global supply route disruptions. The immediate market outlook remains one of cautious optimism amid these complex macroeconomic factors.