Stock Market View: Can Nifty 50 reclaim 25,000 this month amid ‘Maha’ rally on D-Street?

After a significant correction in the last month, Indian benchmark indices have shown signs of recovery. Both Sensex And nifty 50 The gains extended on Monday, November 25, marking a second consecutive day of upward movement. The surge came after the BJP-led NDA alliance’s landslide victory in the state elections in Maharashtra, leading to positive political developments that contributed to improving market sentiment.

During intra-day trading, the Sensex rose 1,356 points or 1.7 per cent to hit an intraday high of 80,473.08, while the Nifty 50 rose over 444 points or 1.8 per cent to an intraday high of 24,351.55. This rally comes after a rise of about 2.5 percent on Friday, November 22.

This latest bounce has taken the Nifty positive for November with a gain of 0.3 per cent, recovering from a 3.5 per cent fall till November 21. October was a particularly challenging month for investors, with the Nifty 50 falling more than 6 percent. So far in 2024, the Nifty 50 index is still up 12 percent, but off 7 percent from its peak of 26,277.35, reached in September.

Political stability promotes optimism

Market sentiment improved significantly due to the results of Maharashtra State elections. The BJP-led Grand Alliance is going to form the government in Maharashtra, which is expected to provide political stability. Investors are particularly optimistic about the impact of this stability on sectors linked to BJP policies such as infrastructure, urban development and manufacturing.

Technical Analysis: Support and resistance levels for Nifty

As the market started recovering, technology Experts are keeping a close eye on the key support and resistance levels for Nifty.

Santosh Meena, Head of Research, Swastika Investmart, It was noted that Nifty found support around 23,200, which is in line with the 61.8% Fibonacci retracement of the previous rally from the election result day low to high of 26,277. Nifty has reclaimed its 200-day moving average (DMA), indicating an encouraging technical development. To sustain the momentum, Nifty needs to overcome its 20-DMA around 24,070, with the next major resistance level at 24,500.

Rajesh Palviya, SVP – Technical & Derivatives Research at Axis SecuritiesThe strong momentum seen in Nifty is supported by its position above the key Call concentration zone at 24,000 levels. A break above 24,300 resistance could extend profits to 24,450-24,500. On the downside, the Rs 24,100-24,000 range is expected to act as strong support.

Ajit Mishra, SVP of Research, Religare Broking Ltd. Suggested Nifty is hovering around its 100-day exponential moving average (DEMA) at 24,350. A decisive close above this level could push Nifty towards 24,550-24,750 zone. On the downside, the 23,850-24,000 range is likely to provide strong support.

Mandar Bhojne, Research Analyst at Choice BrokingMentioned that Nifty faces immediate resistance in 24,400-24,800 zone. The index is currently trading above its 200-day exponential moving average (EMA) with support at 23,500-23,350 levels. For Bank Nifty, resistance lies at 52,000-52,200, with support between 50,600-50,200.

Caution remains in the market

Despite the positive momentum following the election results, caution remains due to geopolitical tensions, rising dollar index and rising challenges. US bond yieldsAccording to Santosh Meena, head of research at Swastika Investmart, although the market has established a temporary low, it remains sensitive to external factors.

Arun Kejriwal, founder of Kejriwal Research and Investment Services, echoed this warning. He highlighted that despite the rally, fundamental concerns remain, particularly the ongoing selling by foreign portfolio investors (FPI) for more than 50 days. He said it remains to be seen whether FPIs will reverse their selling trend in the near future.

The political stability that has come recently BJP’s The victory in Maharashtra has boosted Indian market sentiment. However, caution remains due to ongoing challenges such as geopolitical tensions and foreign investor behaviour. Experts believe investors should closely monitor key support and resistance levels for Nifty and remain selective in their sectoral approach.

Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint. We advise investors to check with certified experts before taking any investment decision.