Weekly Forecast: Analysts Predict Continued Bullish Momentum for Nifty Index

Last week, the Indian equity markets saw a breakout after a five-week consolidation, driven by calming geopolitical tensions that boosted investor confidence. The Nifty 50 ended the June series on a strong note, surging over 2% for the week and closing above 25,500, marking its highest weekly close in more than nine months. Recognized analyst Mayank Singh Chandel noted that the index respected the monthly range of 24,500–25,500 and successfully broke above trendline resistance on the weekly chart. A significant bullish candle with minimal upper and lower wicks formed on the weekly candle, indicating robust buying activity and limited intraday volatility. Chandel identified key support at 25,260 for the week, emphasizing that maintaining this level would sustain bullish momentum. Immediate resistance levels are projected at 25,800, with all-time highs near 26,277. In case of a dip, levels around 25,300–25,260 should be viewed as buying opportunities. The Relative Strength Index (RSI) on the weekly timeframe reflects strength, currently hovering around 64, denoting healthy momentum without reaching overbought levels.

The latest market rally can be attributed to easing volatility, with a significant decline in the India Volatility Index (down 9.36% weekly), indicative of growing investor confidence. Despite Foreign Institutional Investors (FIIs) withdrawing over ₹1.10 lakh crore this year, robust participation from Domestic Institutional Investors (DII) and retail investors has offset these outflows and upheld the market’s upward trajectory. Looking ahead, Chandel anticipated that stabilizing global indicators and an enhanced risk appetite might entice FIIs to re-enter the Indian market, potentially fueling another leg of the rally. He advised traders to maintain long positions with trailing stop-losses, while investors should remain optimistic given India’s structural strengths. However, he cautioned that volatility may rise slightly as the new monthly expiry looms, emphasizing the importance of prudent position sizing and risk management.

Arijit Banerjee from Goodluck Capital echoed a similar positive outlook, citing a pole and flag breakout on the charts as a signal for further uptrend continuation. Notable OI data revealed 25,000 as a robust support level, with substantial put writing indicating strong defense from the bulls. The immediate support lies at 25,500, where significant put buildup demonstrates buyer interest. The 26,000 level is identified as a key resistance area, with call writers actively positioning themselves at this level. A breakout above 26,000 could trigger an upward surge in the market, with expectations of maintaining a bullish sentiment moving forward.

The banking sector has been a pivotal driver behind the recent market strength, with Bank Nifty leading the rally. Factors such as banks lowering fixed deposit rates and the Reserve Bank of India’s reduction in the Cash Reserve Ratio (CRR) have bolstered liquidity in the sector. Bank Nifty recently confirmed a breakout from a pole and flag pattern, aligning with the broader bullish setup observed in the Nifty. OI data points to strong support at 56,000, while 57,000 acts as immediate support with fresh positions being built around this level. Resistance at 58,000 sees active call writers defending this area, and a breakout above 58,000 could usher in further gains. With a solid stance above 57,000, the bullish momentum is anticipated to persist, possibly testing 58,000 in the near future.