Nifty 50, Sensex, Nifty Bank have support to keep the uptrend inact

Nifty 50, Sensex and the Nifty Bank indices came under pressure towards the end of last week. The escalating geopolitical tensions between India and Pakistan triggered a fall in the benchmark indices. The Sensex and Nifty fell over a per cent while the Nifty Bank index was down sharply over 2 per cent.

The ongoing India-Pakistan skirmish can continue to weigh on the market sentiment. However, on the charts, nothing has changed much. The fall last week indicates that it is just a correction within the broader upmove. Also, on the charts, strong supports are seen for the Nifty 50, Sensex and the Nifty Bank index to limit the downside. As such, any fall from here should be considered as a good buying opportunity.

Among the sectors, the BSE Auto index outperformed last week. The index was up 1.54 per cent. The BSE Realty index was beaten down the most. It was down 6.33 per cent.

FPIs buy

Foreign Portfolio Investors (FPIs) continued to buy the Indian equities for the fourth consecutive week. The equity segment saw a net inflow of about $1.65 billion last week. In the last four weeks, the FPIs have poured in about $5.87 billion into the equity segment, a positive signal. Continued FPI buying will aid the Sensex and Nifty to move higher going forward.

Video Credit: Businessline

Nifty (24,008)

Nifty witnessed a fall in the second half of the week after trading stable in the first half. It fell to a low of 23,935.75 on Friday before closing the week at 24,008, down 1.39 per cent.

Short-term view: Immediate support is at 23,900-23,850. Below this, 23,600 is the next important support which can be tested if Nifty declines below 23,850. However, a fall beyond 23,600 is less likely. We expect the Nifty to reverse higher either from 23,850 itself or from around 23,600. That leg of rise will take the Nifty up to 24,300 first, and then to 24,500-24,600 again. Eventually, we expect the Nifty to breach 24,600 and rise to 24,800 in the short term.

This bullish view will go wrong only if Nifty declines below 23,600. If that happens, 23,300-23,200 can be seen on the downside.

Chart Source: TradingView

Medium-term view: The broader bullish view remains intact. As mentioned last week, the broader 23,000-22,000 region is a strong support. The level of 21,650 is a much lower support. A fall below 21,650 is needed to turn the outlook bearish which looks unlikely now.

We can expect the Nifty to sustain above 23,000 itself. A rise to 25,000-26,000 can be seen in the coming months. Broadly, the current leg of upmove has potential for the Nifty to target 28,000-28,500, and even higher over the next one year.

Nifty Bank (53,595,25)

The corrective fall to 53,300 is happening in line with our expectation. Nifty Bank index fell to a low of 53,483.05 and closed the week at 53,595.25. The index was down 2.76 per cent for the week.

Short-term outlook: Immediate support is at 53,450. If the index declines below this support, a fall to 52,500, the next important support, can be seen. However, a fall beyond 52,500 is less likely.

Nifty Bank index can reverse higher either from 53,450 itself or after an extended fall to 52,500. That bounce will indicate the beginning of a new leg of upmove. It can take the Nifty Bank index up to 56,000 again. An eventual break above 56,000 will then clear the way for the Nifty Bank index to target 57,500-58,000 in the short term.

The short-term outlook will turn negative only on a break below 52,500. If that happens, the Nifty Bank index can fall to 51,200-51,000.

Chart Source: TradingView

Medium-term outlook: The broader bullish view will remain intact as long as the Nifty Bank index stays above 52,500. Nifty Bank index can target 61,000 on the upside in the coming months.

We reiterate that 58,000 is an intermediate resistance. A corrective fall from there to 56,000 can be seen before the Nifty Bank index heads up towards 61,000.

Sensex (79,454.47)

Sensex failed to get a strong follow-through rise above 81,000, and fell last week. The index made a low of 78,968.34 and closed the week at 79,454.47, down 1.3 per cent.

Short-term view: Immediate supports are at 78,800 and 78,600. Below that, 78,000 is the next strong support. A fall below 78,000 looks less likely now. A bounce either from the 78,800-78,600 region or from around 78,000 can take the Sensex up to 81,000 again. An eventual break above 81,000 can take the Sensex up to 82,300-82,500.

Sensex has to decline below 78,000 to turn the short-term outlook bearish. In that case, a fall to 77,000-76,500 can be seen.

Chart Source: TradingView

Medium-term view: The big picture remains positive.  The levels of 78,000 and 76,000-75,500 are strong supports.

We retain the bullish view of the Sensex rising to 85,000-86,000 in the coming months. From a long-term perspective, Sensex has potential to target 90,000 and 92,000 over the next one year.

Dow Jones (41,249.38)

The Dow Jones Industrial Average fell initially last week. The index touched a low of 40,759.41 on Tuesday and then bounced back recovering all the initial loss. The Dow Jones then surged to a high of 41,773.22 and fell back again to close the week at 41,249.38, down 0.16 per cent.

Chart Source: TradingView

Outlook: The near-term outlook is positive with a support at 40,800. As long as the Dow sustains above this support, a rise to 42,200-42,300 is still possible.

The price action thereafter will need a close watch because 42,200-42,300 is a crucial resistance zone. Failure to surpass this zone can drag the Dow down to 40,800 and even lower in the coming weeks.

On the other hand, a sustained break above 42,300 will be quite bullish. It will then increase the chances of revisiting 45,000 levels again in the coming months.

Published on May 10, 2025