Buy or sell: Over the past three weeks, the Nifty Index has demonstrated a strong recovery, fueled by Foreign Institutional Investors (FIIs) purchasing stocks worth ₹30,000 crore in the cash market. This bullish momentum was underpinned by both global and domestic factors, notably U.S. President Donald Trump’s decision to pause the implementation of steep reciprocal tariffs and the Reserve Bank of India’s accommodative policy stance, which significantly boosted investor sentiment.
However, rising geopolitical tensions between India and Pakistan have acted as a headwind, curbing the market’s upward movement toward the end of the week.
Technical Analysis
From a technical perspective, Nifty continues its journey toward the resistance zone of 24,500–24,600, which corresponds to the 61.8% Fibonacci retracement level of the broader decline. As previously discussed, the overall market trend remains intact with a buy-on-dips strategy, provided Nifty holds above the critical support zone of 21,700–22,000 on a closing basis. This area aligns with the 23.6% Fibonacci retracement level from the COVID-19 lows, making it a crucial long-term support zone.
On the upside, immediate emotional resistance is visible around the 23,900–24,000 levels, and a successful breakout above this zone could propel Nifty further toward the 24,500–24,600 target, which it is almost achieved.
Due to the renewed geopolitical tensions, the Nifty witnessed profit-booking at the end of the week. As long as Nifty sustains above the 23,800 mark, it has the potential to rebound towards 24,200 and subsequently 24,500 levels. However, if it fails to maintain the 23,800 level, further profit-booking could drag the index down toward 23,500 (aligned with the 200-day EMA) and potentially further down to the 23,200–22,900 zone in the coming weeks, which is 61.8 percent retrenchment of overall increment.
Bank Nifty
Bank Nifty has also shown robust strength, almost touching its all-time high. It is holding firmly above the crucial 50,000 level, which coincides with its 200-day EMA, offering strong technical support for any potential pullbacks. Immediate support for Bank Nifty is now seen in the 52,000–53,000 zone.
Conclusion
Both Nifty and Bank Nifty have closed above their respective crucial monthly support levels — 23,500 for Nifty and 52,000 for Bank Nifty. Long-term support at 21,700 for Nifty and around 50,500 for Bank Nifty remains vital for initiating fresh long positions.
Traders are advised to remain cautious in the current environment, closely monitoring these key technical levels and staying alert to any developments in geopolitical tensions to navigate market direction effectively.
Weekly stocks to buy or sell
Buy Sun Pharma at ₹1785; Stop Loss at ₹1740; Target Price of ₹1850.
Buy Aurobindo Pharma at ₹1220; Stop Loss at ₹1170; Target Price of ₹1300.
Sell HCL Tech at ₹1580; Stop Loss at ₹1620; Target Price of ₹1520.
Sell NTPC at ₹357; Stop Loss at ₹370; Target Price of ₹330.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
