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The Indian stock market displayed a resurgence of positive momentum, with the Nifty 50 index registering a notable gain and closing above the psychologically significant 25,000 level. This achievement marks the highest closing value for the index since May 16, 2025, signaling a potential shift in market sentiment. The day's trading session was characterized by a positive opening, followed by sustained gains throughout the early morning hours, culminating in a high of 25,079. Subsequently, the index entered a phase of consolidation during the mid-day session, eventually managing to maintain its position above the 25,000 mark by the close of trading. This positive performance was underscored by a gain of 148 points, further solidifying the bullish outlook for the near term. The strength of the market was not limited to the headline Nifty 50 index, as the broader market also participated in the rally. The Midcap Index demonstrated significant outperformance, with the Nifty Midcap 100 Index rising by 0.67%. Similarly, the Nifty Smallcap 100 Index advanced by 0.37%, indicating a widespread positive sentiment across different market capitalization segments. This broad-based participation suggests a healthy underlying foundation for the market's upward trajectory. Analyzing the sectoral performance, all sectors concluded the trading day in positive territory, reflecting a comprehensive market rally. Among the top-performing sectors were Nifty Auto, IT, FMCG, and Metal, which registered the most significant gains. The strong performance of the Auto sector could be attributed to positive sales data or expectations of increased demand. The IT sector's gains might be linked to favorable earnings reports or positive outlook for the technology industry. Similarly, the FMCG sector's performance could be driven by resilient consumer demand. The Metal sector's gains could be influenced by global commodity prices and demand dynamics. Specific company news also played a crucial role in shaping market sentiment. JSW Steel experienced a rebound of 3% from its lows following the Supreme Court's decision to allow the company and its committee of creditors to file review petitions regarding the Bhushan Power & Steel liquidation. This ruling provided clarity and alleviated concerns surrounding the company's involvement in the matter. Gillette India Ltd., the grooming products manufacturer, reported its March quarter results, which led to a surge of as much as 12% in the stock price. The positive market reaction indicates that the company's financial performance and future outlook were well-received by investors. Furthermore, both domestic and foreign investors were net buyers in the cash market on Monday, indicating strong investor confidence in the Indian stock market. This buying activity provided further support to the market's upward momentum. Several factors contributed to the positive market sentiment. Positive global cues, particularly the news that US President Trump deferred the proposed 50% tariffs on the European Union until July 2025, boosted investor confidence. Additionally, NITI Aayog's update on India surpassing Japan to become the fourth-largest economy globally further enhanced market optimism. These developments provided a favorable backdrop for the Indian stock market, attracting both domestic and foreign investors.
Technical analysis provides further insights into the potential future direction of the Nifty 50 index. Hrishikesh Yedve of Asit C Mehta Investment Interrmediates noted that the Nifty is still placed near the psychological resistance level of 25,000. He suggested that a sustainable move above this level could propel the index towards the 25,200–25,250 levels in the short term. This indicates that overcoming the 25,000 hurdle is crucial for further upward movement. Yedve also highlighted the 21-Day Exponential Moving Average (21-DEMA) support, which is placed near 24,530. He advised that as long as the index holds above this level, a buy-on-dips strategy should be adopted. This suggests that any temporary dips in the market should be viewed as opportunities to buy, given the overall positive trend. Rupak De of LKP Securities echoed this sentiment, advising investors to buy on any dips from here. He stated that in the short term, the index is likely to remain strong with the potential to extend its gains towards the 25,300–25,350 range. He also identified support at 24,800, providing a downside level to watch out for. These technical levels provide valuable guidance for traders and investors to make informed decisions. Nandish Shah of HDFC Securities pointed out that the Nifty appears to have regained its momentum, decisively breaking out from its consolidation zone of 24,500-25,000. He highlighted immediate resistance at 25,207, which is derived from the 76.4% Fibonacci retracement of the entire fall from 26,277 to 21,743. He also noted that 24,800 could offer immediate support for the Nifty. The Fibonacci retracement level provides a technical basis for identifying potential resistance and support levels. The Nifty Bank index also experienced positive movement, ending at 55,572, up 173 points or 0.31%. However, the index has remained in a narrow consolidation zone for the past 11 sessions, moving between 54,442 and 55,876. During the day, the index approached the upper boundary of this range but fell short of a breakout. This suggests that the banking sector is experiencing some consolidation before potentially breaking out to new highs. Om Mehra of SAMCO Securities noted that the index holds firmly above all key moving averages, indicating short-term support remains intact. He stated that the 20-Day simple moving average, currently at 54,980, may act as immediate support in case of any minor pullback. He also suggested that a sustained close above 55,700 could push the index higher, with scope to retest the all-time high near 56,100. These observations provide insights into the potential trading range and breakout levels for the Nifty Bank index.
Source: Trade Setup for May 27: Nifty regains momentum, could aim for 25,350