Nifty 50 Outlook: Poised to rise

Nifty 50, Sensex and the Nifty Bank index remained stable in a narrow range until Thursday. However, on Friday, the benchmark indices witnessed a strong rise. The movement last week indicates a lack of strong sellers in the market. That keeps our overall bullish view intact. We expect the Nifty and Sensex to break their upcoming resistance and go higher in the coming weeks.

Nifty Bank index, on the other hand, has risen well within its range. We expect the index to make a bullish breakout of its range and move up, going forward.

After buying for four consecutive weeks, the foreign portfolio investors (FPIs) turned net sellers of Indian equities last week — they sold about $336 million in the equity segment.

Short-term view: Nifty managed to sustain very well above 24,000 all through last week. The outlook is positive. Immediate resistances are at 24,400 and 24,500. We expect the Nifty to breach 24,500 and rise to 24,800 or even 24,950 in the coming weeks.

After this rise, a corrective dip to 24,500-24,400 is a possibility. A fresh leg of rally thereafter can take the Nifty up to 25,500 and higher.

Supports are at 24,000 and 23,800. Nifty has to decline below 23,800 to become negative for a fall to 23,600 and lower. But that looks less likely.

Medium-term view: Nifty is attempting to go up within its broad 22,000-26,500 range now. A break above 24,950 can trigger the rise towards 26,500.

The bias remains positive. Nifty can make a bullish breakout above 26,500 and rise to 28,000 and even 30,000 in the long term.

This bullish view will get negated only if the index declines below 22,000. That looks less likely at the moment.

Short-term view: The index has risen well within its 56,500-58,900 range. We need to see if the long-awaited bullish breakout above 58,900 will happen now or not. Such a break can take the Nifty Bank index higher to 60,500 and 61,500.

A break below 56,500 is needed to turn the short-term picture negative. If that happens, a fall to 56,000 or 55,500 can be seen.

Medium-term view: The broader picture remains positive. Nifty Bank index is likely to breach the key resistance level of 61,500. That will clear the way for a rally to 65,000 in the medium term. It will also keep the doors open to target 68,000-69,000 in the long term.

Key supports are at 53,500 and 50,000. Nifty Bank index has to decline below 50,000 to negate the above-mentioned bullish view.

Short-term view: After getting support in the 77,000-76,800 region, Sensex has risen well towards the end of the week. Resistance is in the 78,800-79,000 region, which can be tested this week. We expect the Sensex to breach 79,000 for a rise to 81,000-81,500 in the short term.

Failure to breach 79,000 can drag the index down to 78,000 again. The level of 76,000 is a strong support. The short-term picture will turn negative only if the index declines below 76,000.

Medium-term view: The broader range of 71,000-86,000 remains intact. Sensex is likely to go up towards 86,000, the upper end of the range, in the medium term. A break above 81,500 can trigger this rise.

Eventually, a bullish breakout above 86,000 is likely to be seen in the coming months. Such a break will trigger a fresh rally to 90,000 and even 94,000 in the long term.

The resistance at 23,300 has held well. The Nifty Midcap 150 index has come down after touching a high of 23,239.65. A fall to 22,750 looks likely this week. A bounce thereafter can take the index higher to 23,000-23,300 again. But a break below 22,750 can drag the index down to 22,550.

We retain our overall bullish bias. So, eventually, we expect to see a bullish breakout above 23,300. Such a break can take the Nifty Midcap 150 index higher to 26,000-26,500 initially in the medium term. It will also open the doors for the index to target 28,000-28,500 in the long term.

The above-mentioned rise will get delayed if the index breaks below 22,550 from here. If that happens, a fall to 22,000-21,800 and even lower lev...