Nifty must decisively clear 25,000–25,050 for an extended rally towards 25,350, say analysts.
Indian equities ended on a positive note on Monday, with the Nifty index settling just below 25,000. Sentiment was boosted by the government’s plan to simplify GST slabs, including a cut in tax on small cars from 28% to 18%.
The GIFT Nifty indicates a subdued start for Dalal Street on Tuesday.
Will Nifty Sustain The Gains?
Analyst Dipak Takodara highlighted that while the market momentum is improving, it is not in a firm uptrend yet. He identified fresh support at 24,850–24,800, with the following supports at 24,700–24,750 near the 20-day moving average (DMA), and 24,600–24,650 around the 10-DMA.
On the upside, the first and most important hurdle is seen at 25,000–25,050 (50-DMA). A clean move above this opens the path to 25,250–25,350. The overall bias is only cautiously positive until the index reclaims and holds above the 50-DMA.
As long as Nifty holds 24,850–24,800, a move towards 25,000–25,050 (50-DMA) is likely. A close above 50-DMA can extend the move toward 25,250–25,350. If 24,850 breaks, the index can slip back to 24,750 and 24,650 to test the short-term averages, he concluded.
Tuesday Trade Setup
For today’s session, Pradeep Carpenter noted that the Central Pivot Range (CPR) for the Nifty index is narrow at 24,897–24,916, indicating volatility. Resistance lies at 24,981, 25,086, and 25,151, while supports are at 24,811, 24,74,6, and 24,641.
On the derivatives front, maximum pain is seen at 24,950 with heavy Calls at 25,000–25,200 capping upside, while Puts at 24,700–24,800 provide support. Markets are likely to trade between 24,750 and 25,100.
For the Bank Nifty, Carpenter said that the CPR stands at 55,789–55,901 near the 56,000 mark. Resistance is seen at 56,044, 56,354, 56,553; with supports at 55,535, 55,336, 55,026.
Derivatives data shows maximum pain is seen at 56,000, with Calls heavy at 56,000–56,500 and Puts at 55,000–55,500. The index is seen rangebound between 55,500 and 56,300.
Carpenter concluded that the market action will likely remain sector-driven, with gains in autos, while FMCG and IT could underperform. Indices are likely to stay range-bound unless Nifty breaks 25,000 decisively or slips below 24,800. Bank Nifty must hold 55,500 for stability.
Ashish Kyal noted that the Nifty index managed to close above the previous day’s high. He advised traders to use the dips to buy for a move to 25,200, with support at 24,728 levels.
What Should Investors Do?
Arun Mantri cautioned that the ‘danger zone’ is still open and technicals suggest that 25,150-25,300 is the maximum upside open for now. Support is pegged at the 24,600 level, while 25,100-25,300 is the exit zone for the short-term trading positions, according to him. Mantri advised sitting on cash for the near term.
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