The Nifty has turned cautiously positive, supported by improving technical signals, a rebound in the rupee, and resumption of foreign investor buying. This change in outlook is crucial for investors, as it may indicate a potential upside in the market.
Near-Term Outlook
The benchmark index has gone through a time-wise corrective phase over the past couple of months. During this entire consolidation, the 50-DEMA of 25,774 has acted as a support, and the index has not closed below it. However, the broader markets have witnessed a price-wise corrective phase during this period.
The recent correction eased as FPI buying resumed and the rupee rebounded, which has improved near-term market sentiment. While resistance near the 26,000 mark remains crucial, a decisive breakout could pave the way for further upside, even as intermittent consolidation or volatility cannot be ruled out.
Trading Strategies
Traders can look to buy Nifty around the current market price of 25,966, with a stop loss below 25,700, for a potential upside towards the recent swing high of 26,325, followed by 26,500.
- Buy IDFC First Bank with a stop loss at Rs 82 and a target of Rs 91.
- Buy Bharat Forge with a stop loss at Rs 1,381 and a target of Rs 1,550.
Expert Analysis
Nifty has broken out of a falling wedge pattern, signalling a clear improvement in market sentiment. After several sessions of consolidation, the index has also reclaimed its 21-day EMA on the daily chart, reflecting a return of near-term strength.
A long position in Nifty can be considered with targets at 26,080 and 26,190, while maintaining a stop loss below 25,880. Top stock bets include JK Tyre and Schneider, which have shown strong short-term momentum and upside potential.
Remember
Remember, this is perspective, not prediction. Do your own research and consider your own risk tolerance before making any investment decisions.