The stock market commenced trading on Thursday with a surge of optimism, fueled by the unanimous announcement from the National Democratic Alliance (NDA) that Prime Minister Narendra Modi is set to begin his third term, with his oath-taking ceremony scheduled for Saturday. The positive news propelled the Sensex up by 378.59 points, opening at 74,804.68, while the Nifty rose by 105.65 points, starting the day at 22,726.00.
Among the Nifty companies, 29 witnessed gains, while 21 experienced declines. Notable gainers included NTPC, SBI, ONGC, Coal India, and Power Grid, whereas Britannia, Hindustan Unilever, Cipla, Hindalco, and Nestle India were among the top losers.
Shrikant Chouhan, Head of Equity Research at Kotak Securities, provided insights into the market’s technical performance, highlighting an early sell-off followed by a significant rebound. “Technically, after a sell-off early in the day, Nifty and Sensex found support near 21,700/21,800 levels and rebounded sharply, which is a positive sign. The market rallied 880/2600 points from the day’s lowest point. Moreover, it also reclaimed the levels of 22,500/74,000 or the 50-day SMA (Simple Moving Average), which is also positive,” he remarked.
Chouhan elaborated on the market’s current state, describing it as undergoing an extended pullback following Tuesday’s notable decline. He suggested a potential extension of this pullback up to 22,800 to 22,950 levels, advising a strategy to reduce long positions within this range. Furthermore, he outlined support levels at 22,400 and 22,300, emphasizing that a close below 22,300 could extend the consolidation range, possibly down to 22,000 or 21,800.
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Regarding the Bank-Nifty index, Chouhan indicated a similar extended pullback mode, with potential to reach 49,500 or 49,800 levels. He noted support at 48,500 levels, highlighting the significance of a close below this level, which may push the index down to 48,000 again.
Overall, the market’s robust opening reflects investor confidence following the BJP’s electoral victory. Technical indicators suggest potential for further gains, while traders are advised to monitor key support and resistance levels for strategic decision-making.
Investors remain optimistic as they anticipate Prime Minister Modi’s third term and its potential impact on economic policies and market dynamics. With the broader market outlook positive, attention is focused on navigating through potential volatility while capitalizing on opportunities presented by evolving market conditions.
