The Indian equity benchmarks displayed a robust rally on Monday fuelled by progress in the on-going Iran-US peace negotiations and recovering crude prices that kept sentiment bullish. Going ahead, analysts expect the positive bias to continue.
"The daily chart formed a strong bullish candle, closing above both the 20-day SMA placed at 23,880 and the psychological 24,000 level," said Om Mehra, Technical Research Analyst, SAMCO Securities.
Technically, this market action signals a sustainable breakout of the crucial range movement and is a positive indication and signal continuation of upside momentum for the short term, said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.
Accordingly, the 24,200 level will be a crucial resistance zone. A sustained move above 24,200 could trigger a sharp upside rally, potentially driving the index towards the 24,350 mark, as per Head of Technical and Derivatives Research at SBI Securities, Sudeep Shah.
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On the flipside, the 23,930 - 23,900 zone is expected to act as immediate support for the index.
Notably, the VIX, a real-time market index which measures volatility, had a sharp fall and declined 8% during the day indicating that the market had stabilised.
Nifty Bank
The Bank Nifty index extended its gains and continued to outperform the frontline indices. Analysts expect the index to maintain its bullish momentum.
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"Going ahead, the index is likely to maintain its positive bias and could advance towards 55800, followed by 56300 in the near term. On the downside, the 54900–54800 zone is expected to act as a key support level," said Shah from SBI Securities.
Market Recap
Benchmarks advanced as sentiment improved amid hopes of easing tensions around the Strait of Hormuz. The NSE Nifty 50 closed at 24,031.70, rising 312.40 points or 1.32%, crossing 24,000 for the first time in 11 trading sessions. The BSE Sensex ended higher by 1,073.61 points, or 1.42%, at 76,488.96, marking its biggest one-day gain in nearly six weeks.
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