Nifty 50, Bank Nifty May See Follow-up Buying Amid US-Iran Deal Hopes

Market Witnesses Strong Rally, Experts Eye Follow-Up Buying Interest

The Indian market witnessed a strong rally on Wednesday, with the Nifty 50 surging 298 points (1.24 percent) to 24,331, while the Bank Nifty rallied 1,434 points (2.63 percent) to 55,981, supported by healthy market breadth. A total of 2,230 shares advanced against 737 declining shares on the National Stock Exchange.

The market's uptrend can be attributed to improving momentum indicators and renewed hopes of a US-Iran peace deal, which has contributed to a positive sentiment shift. However, experts caution that follow-up buying interest is necessary to sustain the rally and decisively clear the 24,350 hurdle.

Nifty Outlook and Strategy

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According to Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, the Nifty index has been trading in a narrow consolidation band over the past seven trading sessions, reflecting a phase of indecision among market participants. However, this sideways movement was decisively broken in the final hour of Wednesday's session, when the index witnessed a sharp upward surge.

The index has managed to reclaim and close above its 50-day EMA, which is a positive technical development. Going forward, a follow-through move on the upside will be crucial to sustain and strengthen the emerging bullish momentum. From a levels perspective, the 24,050-24,000 zone is expected to act as a strong and immediate support base.

Bank Nifty - Outlook and Positioning

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Sudeep Shah also noted that the Bank Nifty, which had relatively underperformed compared to the frontline indices, reflected a phase of subdued momentum. However, sentiment witnessed a notable shift on Wednesday, as the index registered a strong bullish move and closed near the 56,000 mark.

This upward rally also enabled the index to reclaim and close above its 20-day EMA, which is a positive technical signal. Looking ahead, the 56,400-56,500 zone is expected to act as a key resistance area for the index. A sustainable move above the 56,500 level would be critical and could trigger a sharp upside rally, with immediate targets placed at 57,200, followed by 58,000 in the short term.

Strategy

Experts recommend buying Nifty Futures between 24,400-24,480, with a stop-loss at 24,270, targeting 24,650. For Bank Nifty, experts suggest buying Bank Nifty Futures above 56,350-56,470, with a stop-loss at 56,000, targeting 57,200.

In conclusion, the market's strong rally on Wednesday has been driven by improving momentum indicators and renewed hopes of a US-Iran peace deal. However, experts caution that follow-up buying interest is necessary to sustain the rally and decisively clear the 24,350 hurdle. The Bank Nifty is also expected to continue its upward move, with the 56,400-56,500 zone acting as a key resistance area.