After a two-day dip, the Indian stock market roared back to life on Thursday, leaving investors with a sense of optimism for Friday’s session.
With Nifty50 finding strong support at 21,500 and forming a bullish candlestick pattern on January 4, experts predict a potential march towards the psychological 22,000 mark in the coming sessions.
Highlights:
- Nifty50 surges 141 points to close at 21,659, forming a bullish “Inside Day” pattern.
- Analysts at HDFC Securities and GEPL Capital see further upside towards 21,850-21,900 and even 22,000 in the short to medium term.
- 21,550-21,600 seen as immediate support.
Bulls maintain the upper hand:
Following a rebound of 491 points for Sensex and 141 points for Nifty50 on January 4, analysts are optimistic about the near-term trajectory of the market. Nagaraj Shetti of HDFC Securities views the positive candle formation on the daily chart as a signal of potential bull dominance, with Nifty likely to test 21,850-21,900 levels if it sustains above 21,550-21,600.
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Eyes on the prize:
Vidnyan Sawant of GEPL Capital aligns with the bullish sentiment, setting specific targets of 21,834 (record high within 21,800-21,850 range) and 22,000 for the short to medium term. This bullish outlook strengthens the possibility of sustained gains for the index in the coming days.
Here are 15 key points to keep in mind before the opening bell:
1. Bulls Remain Strong: Despite the recent dip, analysts believe the bulls are still in control. The Nifty50’s strong defense at the 21,500 support level and the formation of a bullish candlestick pattern suggest further upside potential.
2. Target: 21,800-21,850: Experts like Nagaraj Shetti from HDFC Securities see the Nifty aiming for the 21,800-21,850 range if it surpasses the 21,550-21,600 hurdle.
3. Psychological Barrier at 22,000: A sustained climb above 21,850 could even pave the way for a test of the psychological barrier at 22,000, adding to the bullish sentiment.
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4. Bullish Inside Day Pattern: The small positive candle formed on Thursday, enclosed within Wednesday’s bearish candle, is technically considered a bullish “Inside Day” pattern, further strengthening the likelihood of upward movement.
5. Short-Term Trend Reversal: Shetti believes the Nifty’s short-term trend has reversed to the upside after two sessions of minor weakness.
6. Immediate Support at 21,550: Should the bulls face any resistance, immediate support is seen at the 21,550 level.
7. GEPL Capital Echoes Bullish Sentiment: Vidnyan Sawant of GEPL Capital also maintains a bullish outlook, with target zones set at 21,834 (record high) and 22,000 in the short to medium term.
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8. Overall Chart Structure Supports Bullish View: Sawant bases his bullish stance on the overall chart structure, suggesting a positive trajectory for the index with sustained gains likely in the near future.
9. Global Cues Remain Crucial: While the domestic market outlook appears positive, it’s important to monitor global cues, particularly from the US markets, for potential headwinds.
10. Sectoral Focus: Banking, IT, and energy sectors are expected to remain in focus on Friday, with potential for further gains.
11. Volatility Might Increase: With the bulls charging ahead, volatility levels could increase in the coming sessions, requiring cautious trading strategies.
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12. F&O Expiry Week: The week of January 5th is an F&O expiry week, which could lead to increased activity and volatility in derivatives markets.
13. Profit Booking Potential: After a strong rally, profit booking cannot be ruled out, especially if the Nifty reaches its near-term targets.
14. Data Releases: Investors should also keep an eye on any key economic data releases that could impact market sentiment.
15. Risk Management Essential: Regardless of the bullish outlook, it’s crucial to employ proper risk management strategies and maintain a disciplined approach to trading.
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Disclaimer: This analysis is based on expert opinions and market trends. However, it is not a recommendation to buy or sell any particular stock. Investors are advised to conduct their own research and consult with financial advisors before making investment decisions.
