The Nifty rose for the seventh straight session and traded above the 24,600 mark on November 6. Analysts said, "Index sustaining above Thursday’s gap area of 23,960-24,296 will keep the bias positive." While the market showed strength, experts suggest that dips should be used as a buying opportunity for investors.
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Benchmark index Nifty rose for seventh straight session and was trading above 24,600-mark on November 6.
Does this massive rally have more steam left or will the markets take a sharp U-turn? Here's what analysts said.
"Index sustaining above Thursday’s gap area of 23,960-24,296 will keep the bias positive and open further upside towards the August high of 24,774 in the coming sessions. Only a formation of sustained lower high and lower low in daily chart and a close below Thursday's gap area will signal a pause in the current strong rally.
"Nifty has seen a strong up move of more than 2,100 points in the last 9 sessions. Hence, some consolidation cannot be ruled out at higher levels, stock specific action will continue to remain in focus.
"The short-term support in Nifty is revised higher towards 23,600-23,800 levels being the confluence of the 200 days EMA and the current week breakout area, holding above the same will keep the overall bias positive and dips should be used as a buying opportunity," said Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking.
On the upside, resistance is placed at 24,800, with the psychological 25,000 mark serving as the next key hurdle, said Axis Securities.
The Nifty 50 and Sensex jumped 2.4% on Thursday to 24,536.6 and 79,310.01, respectively. The benchmarks have gained more than 8% over six sessions, their longest winning streak in a year, narrowing their underperformance against emerging-market peers.
At 12:27 pm, the Sensex was up 730.59 points or 0.92% at 80,040.60, and the Nifty was up 158.90 points or 0.65% at 24,695.50. About 1,250 shares advanced, 2,595 shares declined, and 167 shares were unchanged.
Though Brent crude eyes a 13% weekly loss near $99, the domestic technical bias turns strictly cautious with an overbought RSI. Staying below 24,800 keeps the undertone subdued. Support lies at 24,300 (a break risks 24,000); reclaiming 24,700 targets 25,000, said Hemang Gor, Senior Research Analyst - Derivatives and Technical Research, Axis Direct.
For day traders, 24,350/78,700 would act as a key support level. As long as the market is trading above this level, bullish sentiment is likely to continue. On the higher side, the rally could continue till 24,700–24,800/79,800-80,000. On the flip side, below 24,350/78,700, the correction could continue till 24,250–24,150/78,500-78,200. Buying on dips is recommended between 24,300-24,100 levels, said Shrikant Chouhan, Head Equity Research, Kotak Neo.
Indian equities should maintain their positive trajectory, said Siddhartha Khemka, head of research for wealth management at Motilal Oswal Financial Services.
"The US midterm election outcome has further lifted global sentiment, with expectations of a more measured approach to trade and tariffs, alongside a weaker US dollar and the 10-year US Treasury yield easing," Khemka said.