Nifty 50 outlook for the week: Out of the woods
The rise last week keeps the broader sideways range intact
Last week, the Nifty 50, Sensex, and Nifty Bank index experienced a significant surge. The Nifty and Sensex both rose by 2.78% and 3.11%, respectively, while the Nifty Bank index saw an increase of just over 1%. This positive movement provided a much-needed relief to the Indian benchmark indices, aligning with the anticipated recovery. Foreign Portfolio Investors (FPIs) continued to sell Indian equities for the third consecutive week, resulting in a net outflow of approximately $830 million for the month of October.
In the short term, the Nifty needs to surpass the resistance level of 23,150 to potentially climb above 23,300-23,500. If this break occurs, the index could advance towards a target of 23,300-23,500. A successful breach of 23,500 would clear the path for a further rise to 24,000. Conversely, a decline below 23,850 would put the Nifty under pressure, potentially leading to a drop to 23,600 and lower. However, this scenario seems less probable at present.
On the medium-term horizon, the Nifty is expected to maintain its bullish outlook. A rise above 23,000 last week confirmed the intactness of the 22,000-26,500 range. The anticipated surge to 24,000 will strengthen the bullish case, potentially pushing the Nifty to the upper end of this range, at 26,500. This would solidify the long-term bullish perspective. The expectation is for the Nifty to breach 26,500, continuing its rise towards 28,000 and 30,000 in the long term.
Regarding the Nifty Bank index, short-term support is expected around the 55,500-55,350 region. A decline below this support level could trigger a fall to 54,500-54,000. However, such a decline appears unlikely. In the medium term, the broader bullish view remains intact, with the potential to revisit 60,000-61,000 and eventually reach 65,000-68,000-69,000. A break below 51,000 would negate the long-term bullish view.
On the broader Sensex front, the strong rise above 73,500 confirms the double-bottom pattern, reinforcing the positive bias. The index could test the immediate resistance level of 75,200, potentially climbing further to 77,000-78,000 in the short term. If the Sensex reverses from around 75,200, a dip to 73,500 could occur, followed by a resurgence towards 77,000-78,000. A fall below 73,300 would once again put the outlook in a negative light, potentially leading to a decline to 71,500.
In the medium term, the 71,000-86,000 range remains intact for the Sensex. There are high chances for it to rise towards 86,000, the upper end of this range, over the medium term. The long-term bullish view is retained, with the potential for the Sensex to breach 86,000, rallying to 90,000 and even 94,000. However, this view would only be invalidated if the Sensex declines below 69,800.
The resistance in the 21,900-22,100 region has continued to limit upside for two consecutive weeks. While daily candles show a negative bias, staying below 22,100 could delay a fall to 21,300-21,200 or even lower. A strong rise above 22,100 would avoid this downward trajectory and pave the way for a rise to 22,800-23,000 again. The long-term outlook remains positive, with a continued bullish view of the Nifty Midcap 150 index breaking above 23,500, eventually reaching 26,000-26,500 and 28,000.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
