Indian equity markets witnessed an exceptional week, with the benchmark index surging over 8.50%, supported by favorable global cues and encouraging macroeconomic developments. The strong upward momentum enabled the index to decisively reclaim the crucial 25000 mark, registering an impressive rally of nearly 2000 points. This remarkable performance ranks among the strongest weekly gains in recent market history, underscoring a significant revival in investor confidence, robust buying interest, and strengthening bullish sentiment. The broad-based optimism reflects improving market dynamics and renewed expectations of sustained upward momentum.

Further strengthening the positive sentiment, the Nifty50 recorded its highest close of the current financial year, reflecting a meaningful recovery in investor confidence following an extended phase of correction and consolidation. Broad-based market participation and sectoral rotation have provided further impetus to the rally. Additionally, supportive global developments, easing crude oil prices, appreciation in the Indian rupee and, most importantly, renewed FII inflows into domestic equities have collectively reinforced the upward momentum, strengthening the overall market outlook.

From a technical perspective, the Nifty50 has staged a sharp vertical rally, decisively moving above all its key EMAs and the 200-DSMA and with this, momentum indicators have entered overbought territory, warranting a cautious approach. Some profit booking cannot be ruled out and should be viewed as a healthy consolidation to sustain the broader bullish trend. On the downside, the 24770-24500 zone is expected to offer immediate cushion, while the bullish gap around 24300 remains a crucial support zone. On the upside, 25150 may act as an intermediate hurdle, followed by resistance near 25400.

Going ahead, amid the festive season and truncated trading week, traders should adopt a stock-specific approach, with thematic opportunities remaining in focus. Given the sharp rally and overheated technical indicators, a conservative stance coupled with disciplined risk management is advisable. With most of the easy gains already captured, selective participation and prudent position sizing will be key.

Osho Krishan, Chief Manager – Technical & Derivatives Research, Angel One.