Bank Nifty: Nifty eyes new highs as Bank Nifty leads market rally

Indian markets witnessed a buoyant mood on Monday, with Nifty emerging from its long period of consolidation. According to Rajesh Bhosale, market strategist, technical indicators suggest further upside for the benchmark index.

Bhosale said, “So, yes, a very cheerful mood in our markets. In fact, if we see after last one year of consolidation, Nifty has finally come out of its consolidation mode. If we see on the weekly and monthly charts, Nifty has given a trend line breakout and as per that we are expecting new highs very soon. Bank Nifty is already trading in the uncharted territory and we expect Nifty to follow the same. So, buy on dip is what we would be suggesting. Today it is the weekly expiry, so because of that post the gap up we are seeing some consolidation but in the coming sessions we expect Nifty to head further higher. So, a buy on dip would be suggested, immediate support would be around 25,700 and the targets should be 26,000 and then towards the 26,300 levels.”

The focus on banking stocks comes amid a broader rally, with certain counters showing strong technical setups.

When asked for stock-specific recommendations, Bhosale said, “So, as you highlighted banking space is doing well, but in this rally IndusInd Bank has not participated but now if we see some kind of base formation is happening in the IndusInd Bank. In fact, in the morning session it was under pressure but from the morning lows IndusInd Bank has bounced very sharply and on the daily chart we are seeing it crossing beyond the 50 EMA. So, we expect IndusInd Bank to perform well from current levels, good risk-reward levels, so 735 would be the stop loss and from here onwards we expect the targets of around 820 levels.”

Bhosale also highlighted opportunities in the pharmaceutical sector. “The second buy call is from the pharma space. Some of the pharma spaces are doing very well and from this we are liking Dr Reddy’s. If you see since last couple of weeks it has been forming a base around its 200 DMA and now we are seeing a double bottom kind of formation breakout. Also, the prices have broken out above the 89 EMA. So, we expect good risk-reward in this counter as well. So, Dr Reddy’s can be bought, 1240 would be the stop loss and we are expecting target somewhere around 1340 levels.”

With Bank Nifty leading the charge and Nifty breaking out technically, analysts suggest cautious optimism and a “buy on dip” approach for investors looking to benefit from the ongoing market rally.