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All is well. This is what the charts of Nifty 50, Sensex and the Nifty Bank indicate after the smart recovery last week.
The benchmark indices opened the week with wide gap-down on Monday. But thereafter, they managed to rise back well all through the week and recovered almost all the loss. Nifty and Sensex were down about 0.3 per cent for the week. Nifty Bank index on the other hand was down by a per cent.
Last week we had said that a sideways consolidation is possible in a worst-case scenario. That seems to be working out very well. Also, as mentioned, the fall last week actually gave a very good buying opportunity in the Indian markets.
Among the sectors, the BSE Consumer Durables and BSE FMCG indices surged the most last week. They were up 3.49 and 3.34 per cent respectively. The BSE Realty index, down 4.08 per cent was beaten down the most last week.
FPIs sell
Foreign Portfolio Investors (FPIs) continued to sell the Indian equities. They sold about $2.47 billion in the past week. The month of May has seen a net outflow of about $3.68 billion from the Indian equity segment.
Video Credit: Businessline
Nifty 50 (22,828.55)
Nifty opened with a wide gap-down last week at 21,758.40 and touched a low of 21,743.65 in the early trades on Monday. But thereafter, the index managed to rise back very well to recover most of the loss. Nifty made a high of 22,923.90 on Friday before closing at 22,828,55, down 0.33 per cent for the week.
Short-term view: The bias is positive. Immediate support is at 22,700. Below that, 22,450 is the next important support. Nifty can test 23,100-23,200 in the near term. A break above 23,200 can then take the index up to 23,900-24,000 in the short term.
This 23,900-24,000 is a very crucial resistance zone. Nifty has to get a decisive break above 24,000 in order to boost the bullish momentum and also to confirm a trend reversal.
On the other hand, Nifty will come under pressure again only if it declines below 22,450. If that happens, we can see a fall to 22,000 or 21,700 again.
Chart Source: TradingView
Medium-term view: The crucial support at 21,700-21,650 is holding very well. That keeps the Nifty in a sideways range as seen from the monthly chart. So, as long as the Nifty stays above this 21,700-21,650 support zone, the bias will remain bullish.
As aforementioned, a break above 24,000 will confirm the trend reversal. Such a break will take the Nifty up to 25,000-26,000 initially. It will also keep the doors open for the Nifty to target 28,000-28,500 over the long term.
This bullish view will go wrong only if the Nifty breaks below 21,650. In that case, the danger of a fall to 20,000-19,500 will come into the picture. But such a fall looks less likely.
Nifty Bank (51,002.35)
Nifty Bank index tumbled to a low of 49,156.95 and then has risen back well above the psychological 50,000 mark. The index touched a high of 51,244.70 and closed the week at 51,002.35, down 0.97 per cent.
Short-term view: The strong and immediate rise back above 50,000 last week keeps the bias positive. Support for the Nifty Bank index is at 50,000-49,900. A strong follow-through rise from here can take it up to 52,000 initially. An eventual break above 52,000 will see the index moving up to 52,800 or 53,100 in the coming weeks.
An extended rise to 54,000 will come into the picture once a decisive break above 53,100 is seen.
The short-term view will turn negative only if the Nifty Bank index breaks below 49,900. Such a break can drag the index down to 49,000 or even 48,000. But such a fall looks less likely. We expect the Nifty Bank index to sustain above the 50,000-49,900 support zone itself.
Chart Source: TradingView
Medium-term view: There is no change in the big picture. The view continues to remain bullish. The break above 53,100 and the rise to 54,000 will strengthen the bullish momentum. It will then clear the way for the rally to 58,000-58,500 over the long-term.
We repeat that 48,000-47,700 will continue to be the crucial support zone. A fall below 47,700 is needed to negate the bullish view and drag the Nifty Bank index down to 46,000. But such a fall looks unlikely.
Sensex (75,157.26)
Sensex rose back sharply after making a low of 71,425.01. The index made a high of 75,467.33 before closing the week at 75,157.26, down 0.28 per cent.
Short-term view: The bias is positive. Immediate support is at 74,800. Below that 73,700-73,600 is the next important support zone. Resistance is at 76,150-76,200 which can be tested this week. A break above 76,200 can take the Sensex up to 77,300-77,500 initially. An eventual break above 77,500 will then clear the way for a test of 78,900 and 79,100 in the short term.
Sensex has to decline below 73,600 to turn negative. Only then it can fall back to 71,000.
Chart Source: TradingView
Medium-term view: The broader picture remains positive. Strong supports are at 71,500 and 70,800. The region between 78,900 and 79,100 is a key resistance zone. We expect the Sensex to breach 79,100 going forward. That will boost the bullish momentum and take the index up to 90,000 over the long term.
Sensex has to decline below 70,800 to negate the aforesaid bullish view.
Dow Jones (40,212.71)
The Dow Jones Industrial Average was very volatile last week. The index fell to a low of 36,611.78 and then rose back sharply recovering all the loss. The index has closed the week at 40,212.71, up 4.95 per cent.
Chart Source: TradingView
Outlook: The immediate outlook is unclear. Resistances are at 40,800, 41,700 and 42,250. The Dow Jones can rise to test these resistances if it manages to sustain above the support at 39,500. On the other hand, if the index declines below 39,500, it can fall back to 38,000-37,000 again. It is a wait and watch situation now.
Published on April 12, 2025
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