Nifty Seen Targeting 24,500 in Short Term Amid Bullish Momentum

Indian Stock Market Sees Biggest Single-Day Gain Since April 15

The Indian stock market, indicated by the benchmark indexes Sensex and Nifty, experienced a significant surge on May 6 as hopes of a possible deal between the US and Iran to end the war pushed crude prices lower. This easing of concerns over the impact of crude oil prices on growth and inflation in India led to a boost in global equities.

Brent crude prices dropped by 7.5% to approximately $102 per barrel, following a report from Axios that Washington believes it is close to a one-page framework agreement with Iran to end the war. This development led to a sharp decrease in crude prices, which in turn lifted global equities.

Key Indexes Post Significant Gains

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The benchmark Nifty 50 rose by 1.24% to 24,330.95, while the BSE Sensex added 1.22% to 77,958.52. This marked the biggest single-day gain for the indexes since April 15.

Analysts predict that Nifty could easily reach 24,500 in the short term, with a decline in the volatility index further supporting the ongoing bullish momentum. The markets staged a strong rebound, with Nifty closing above the immediate resistance at 24,300 levels.

The indexes have established a strong support zone around 24,000, which aligns with both the 21-day Moving Average (DMA) and 50-DMA. Additionally, Nifty has broken out of a symmetrical triangle pattern on the daily chart, indicating a positive shift in the short-term structure with potential upside towards 24,500 levels.

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The volatility index, India VIX, declined sharply by 7%, slipping below the 17 mark to a one-month low. This continued easing in volatility is likely to further support the ongoing bullish momentum.

Analysts' Predictions

• Nilesh Jain, VP- Head of Technical and Derivative research at Centrum Finverse Ltd, predicts that the index may move higher with a potential upside towards 24,285–24,350. On the downside, support is placed at 23,880, below which weakness could intensify.
• Rupak De, Senior Technical Analyst at LKP Securities, suggests that the index may move higher with a potential upside towards 24,285–24,350. On the downside, support is placed at 23,880.
• Gaurav Garg, Research Analyst Lemonn Markets Desk, believes that the strong rebound from intraday lows reflects underlying strength in the market, with a cautiously optimistic near-term outlook.
• Ajit Mishra – SVP, Research, Religare Broking Ltd, predicts that the rebound in banking stocks played a crucial role in the market's recovery. Indications favour further upside towards 24,550 and then 24,750 levels. On the downside, support remains intact at 24,000–23,800.