Market Summary:
Nifty continued its robust upward journey on Monday, surging by 500 points to close the day at 23,328.55. The session began with a massive upside gap of 540 points, reflecting strong bullish sentiment driven by positive global cues and optimism surrounding tariff relaxations and exemptions. The Sensex also mirrored this momentum, gaining 1,578 points.
Despite the strong start, the index mostly traded in a narrow range between 23,250 and 23,350 throughout the session, consolidating gains as investors evaluated the sharp initial rally.
Technical Analysis:
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A small red candle with a lower shadow was formed on the daily chart, typically interpreted as a pause in momentum or an uptrend continuation pattern.
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The 200-day EMA hurdle at 23,360 is now within striking distance, and the index appears poised for a potential upside breakout.
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The presence of multiple unfilled upside gaps over recent sessions signals runaway gaps, a strong indication of mid-trend bullish continuation.
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On a broader time frame, the market continues to hold an uptrend continuation formation, reinforcing bullish sentiment.
Candlestick Pattern & Indicators:
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The chart reflects a Hanging Man pattern, suggesting possible short-term exhaustion in the rally.
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However, the 100-EMA breakout and RSI positive crossover support the continuation of the bullish trend.
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India VIX recorded a sharp 20% decline, adding further confidence to the bulls by indicating reduced volatility and risk perception.
Resistance & Support Levels:
| Level | Nifty | Sensex |
|---|---|---|
| Immediate Resistance | 23,370 - 23,440 | 76,900 - 77,300 |
| Next Upside Target | 23,650 and 23,870 | |
| Immediate Support | 23,200 - 23,135 | 76,400 - 76,100 |
| Critical Support | 23,050 (break may trigger 23,000 test) |
A decisive move above 23,400 could signal a fresh leg in the rally, while a break below 23,050 might indicate a short-term correction.
Sectoral Performance:
All major sectors ended the day in the green, with notable performances as follows:
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Realty Index: +5.75% (Top Outperformer)
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Auto & Financials: Strong contributors to the index rise
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Midcaps & Smallcaps: Both rose nearly 3%, outperforming benchmark indices
Market Sentiment & Global Cues:
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Optimism stemmed from deferral of global tariffs and exemptions on selected products, hinting at progress in trade negotiations.
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Falling crude oil prices are acting as a double-edged sword—supporting inflation expectations but also reflecting fears of slowing global demand.
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FII outflows and concerns of global economic slowdown due to trade uncertainties continue to pose risks.
Outlook & Strategy:
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The near-term trend remains bullish, and as long as the index trades above 23,130, traders may adopt a buy-on-dips and sell-on-rallies strategy.
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However, overbought technical conditions may lead to minor profit-booking at higher levels.
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A stock-specific approach with an emphasis on quality selection and disciplined trade management is recommended, especially in a narrow-range market.
Conclusion:
The current momentum, supported by strong global cues and sectoral breadth, positions Nifty well for further gains. However, traders should remain vigilant of possible pullbacks and focus on maintaining a balanced, risk-managed approach as the index hovers near key resistance zones.
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