After a strong rally in the last two weeks, the Nifty 50 index has performed better than the US market, which is down over 2%. Nifty followed up last week’s sharp recovery by moving past the 23,800 mark and ended the week at 23,852, up by 4.4%. Looking ahead, experts expect Nifty to continue its upward trend, aiming for a target of 24,200 in the coming weeks.
One important thing to note is that the current recovery in Nifty is happening faster than expected. In the past nine days, the market has already made up for the decline of the last two months, which shows a strong recovery. Similarly, Bank Nifty, which makes up 37% of Nifty, has recovered from a six-month correction in just two months. This quick bounce back suggests that the market may continue to rise towards 56,000 in the coming months.
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The current rally is supported by strong momentum and participation from various sectors. For example, the momentum indicator has shown a sharp improvement after hitting its lowest level in February. Additionally, the number of stocks performing well is increasing, with more than 70% of stocks now above their 50-day and 200-day moving averages. This broad market participation suggests that the rally has the potential to last.
With the market forming higher peaks and troughs, experts are raising the support levels for Nifty to 23,300, while Bank Nifty’s support is now at 52,300. Historically, after similar market corrections, buying at these levels has been profitable, with an average return of 23% over the following year.
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Both Nifty and Bank Nifty have seen strong recoveries of 10% and 11% in the past two weeks. However, this has pushed the market into an overbought territory, which means there could be a short-term pullback or a temporary pause in the rally. But experts suggest that this should not be seen as a negative sign. Instead, it’s an opportunity to buy quality stocks, especially during the ongoing earnings season. So, the best strategy is to buy on dips and focus more on domestic factors than global ones.
