BULLS HAD A RELIEF RALLY LAST WEEK! NIFTY STILL HAS MAMOTH LEVELS TO CROSS FOR A SUSTAINABLE GROWTH AHEAD!

Dated: 08/03/2025

A sign of relief seen on Dalaal Street last week after a terrified dip below 22000 initially was seen. Nifty initially took a deep dive towards 21964.60 in its initially two trading sessions of the week later on some relief rally was seen after nearly 4 weeks which was much awaited by the traders / investors. However, this rally is expected to find its hurdle somewhere near to 22700-22850 kind of levels wherein the probably pull back towards lower levels are expected unless some short covering by FII’s in Index shorts happens & these levels are decisively been taken out.

After the steady fall in Nifty of nearly 16.50% from the ATH of 26277.35 this if for the first time that Nifty gained slightly 1.93% last week following the recovery from the bottom where the low’s of 21964.60 were tested & then a sharp upmove came towards the high’s of 22633.80 finally to give a close at 22552.50. Though Nifty delivered the losing streak after almost 28years where consecutively 5 months negative close has happened still the hope of the investor’s remains stagnant.

Furthermore in the coming week ahead 22700-22850 remains as a immediate hurdle followed by major hurdle now lying within the range of 23000-23250 kind of levels while on the downside we now have a possibility of a pull back towards 22100-22200 followed by if any deep cut comes could be towards 21287-21500 kind of levels & thereafter a smooth sustainable potential upside could be seen in the broader markets ahead.

This time the though some ease up has been seen in the broader markets but the major hit which the portfolio has seen in last 5 months is still unmatched & still it has far long journey to recover from hereonwards. FII’s have continuously been on the sell side in Cash markets while in derivative segment they are slightly buying in stock futures but are in net shorts in index. This mix view shows some less intensity selling by the foreign institutional investors.

The Indian Equity markets have gained many recent news items where major of the news items are mentioned below:

• Repo rate cut of 25bps by RBI followed by possible further rate cut in April quarter of 25bps

• Further liquidity infusion of Rs.1 Lacs cr. by RBI in two tranches of Rs.50,000 cr. March 12^th & 18^th

• Continuous easing up of Dollar index which now is well below 104 & made low of 103.46

• India-US tie-up on certain items for long term trade relations, etc.

• GST collection hit another milestone of Rs.1.84 lacs crore in February risen by 9.1%.

It has been filled with lots of news let it been domestic or international & mainly positive one which has been supporting the markets but few factors which now holds on the hope for a stronger momentum ahead are:

1. Further liquidity infusion of Rs.1 Lacs cr. by RBI in two tranches of Rs.50,000 cr. March 12^th & 18^th

2. Q3 earnings of major companies are showing positive results furthermore Q4 is expected to add further strength in the Indian Companies ahead.

3. Slowdown in the Indian growth rate in 3 quarters of FY 2024-25 but projection of RBI for the FY 2025-26 seems in line.

4. Brent Crude tested low’s of 68.33

5. USDINR tested 87.10 which is further to cool off with RBI’s intervention

6. DXY (Dollar Index) tested low’s of 103.46

In all these flow’s one thing remained consistent where FII’s continued to remain on the Net sell side & doesn’t seem to stop anywhere near now but the intensity of selling has reduced significantly. FII’s have been in no mercy for the Indian domestic Equity markets as their relentless selling has been nonstop where since the beginning of the October 2024 month FII’s have done massive selling amounting to Rs. 3,39,266.60 crore combined of October, November, December, January & February 2025 so far in March 2025. This has lead the entire pressure on the Indian Domestic Equity Markets overall FII’s have sold nearly Rs. 3 Lacs cr. in the Calendar year 2024 & so far approximately Rs.1.60 lac crore in 2025 while on the contrary DII’s were the main supporters of the entire Indian domestic Equity Markets with whopping buying of Rs. 3,58,329.19 cr. since the beginning of October 2024 & in the Calendar year 2024 they have bought more than Rs. 5.26 Lacs cr. & Rs. 1.70 lac crore approx. so far in 2025.

However, Nifty has so far given 16.50% correction from the top of 26277.35 & its 19-20% fall completes at 21287-21500 range where we could finally assume the correction could finally get over once in for all while Nifty has made another history of continuous negative closing of 5 months after 28yrs. On the other side FII’s net longs stands @15-17% & which resembles near to the historic low of net long positions by the FII’s. Which continuously signifies & has now possible bottom formation somewhere near 21287-21500 which indeed has turned the game & bottom was formed in Nifty. Now we expect the FII’s long positions to rise towards 24%, 48% & followed by 67% in the coming months ahead which may take Nifty & broader markets again on the higher levels.

In the wholesome broader markets witnessed some key events & their outcomes last week which are described as follows:

Domestic News (Mainly consists of Union Budget 2025-26 Outcomes):

• The RBI said it would go for open market operation (OMO) auctions to purchase government securities worth ₹1 trillion in two tranches of ₹50,000 crore each on March 12 and March 18. Additionally, a USD/INR buy-sell swap auction for $10 billion with a tenor of 36 months is scheduled for March 24.

• GST collection hit another milestone of Rs.1.84 lacs crore in February risen by 9.1%.

• Further liquidity infusion of Rs.1 Lacs cr. by RBI in two tranches of Rs.50,000 cr. March 12^th & 18^th

• Q3 earnings of major companies are showing positive results furthermore Q4 is expected to add further strength in the Indian Companies ahead.

• Slowdown in the Indian growth rate in 3 quarters of FY 2024-25 but projection of RBI for the FY 2025-26 seems in line.

• Brent Crude tested low’s of 68.33

• USDINR tested 87.10 which is further to cool off with RBI’s intervention

International news:

• DXY (Dollar Index) tested low’s of 103.4

• US. commerce Secy to India Today TV: US Wants manufacturing of pharmaceuticals, semiconductors to come home with support of tariff wall US. Commerce Secy to India Today TV: India needs to end buying arms from Russia ||

• US Commerce Secy to India Today TV: US Wants trade with India to be more fair

• US. commerce Secy to India Today TV: US Wants manufacturing of pharmaceuticals, semiconductors to come home with support of tariff wall. Us commerce secy to india today tv: India needs to end buying arms from Russia || US Commerce Secy to India Today TV: US Wants trade

• Railtel Corp: co got work order from east central railway worth 475m rupees

• US president trump says Canada and India are high-tariff nations

In the institutional segment the FII’s remained negative with net sell of Rs. 15,501.57 cr. but here DII’s have been the buyer’s with Rs. 20,950.89 cr. last week. FII’s have been brutal but history has shown whenever FII’s have shown merciless selling pressure we somehow make another bottom supported by DII’s massive buying as monthly retail SIP data surpassed Rs.26,000 cr. p.m. remains stagnant.

Nifty last week shown pressure initially where low’s of 21964.60 was tested eventually it gained strength & hit a high of 22633.80 to give a close at 22552.50 with net gain of 427.80 points i.e. 1.93%. Nifty has almost corrected so far 16.50% now while moving ahead the possible hurdle now lies within the initial range of 22700-22850 followed by 23000-23250 while a pull back is expected in the coming week ahead towards 22100-22200 below this the crucial support zones of 21287-21500 kind of levels. As by the time Nifty touches 21287-21500 range the overall correction would be almost 19% (near to 20% from ATH). . The support from Banking space & Reliance Industries may continue to flourish in coming weeks as well.

Sensex too remained under pressure initially but eventually it gave a positive week with net gain of 1134.48 points i.e. 1.55% gain for the week. The crucial support here remains at 72600 if breached followed by 70000-71000 kind of levels which could also be considered as crucial support levels while on the upside from those levels 75000-77000 could now remain as an immediate target zones. The support from Banking space & Reliance Industries may continue to flourish in coming weeks as well.

In Bank Nifty the overall trend has been sideways to slightly positive so the crucial support still remains within the pre-defined range of 47500-47800 kind of levels & any breach below this could trigger a downward move towards 45000 kind of levels while on the upside the potential levels remains at 50000 & major trend reversal on a close above 51500 kind of levels. Unlike earlier times major potential upside could be supported by Private Banks forming HDFC Bank & Kotak Banks etc.

In the Nifty Financial Services the crucial supports continues to remain at 22000-22850 kind of levels while the potential up move could get us 24000 kinds of levels.

In “Nifty IT” as earlier mentioned we have almost tested the levels of 36000 by making low of 36797.40 to give a close at 37820.45. As we move ahead the major crucial support still remains at 36000 kind of levels while potential upside & immediate hurdle now continues to lie at 4000 kind of levels with major heavy weight like TCS Infosys & Wipro remain into focus for the moves ahead.

Till October 2024 the number of Demat Accounts has risen to whopping 20cr. this not only helps the capital markets directly but also directly to Equity investments.

The monthly SIP in Indian markets now rose at Rs. 26,000 cr. per month.

Brief Levels of Nifty / Sensex/ Bank Nifty / Nifty Financials / Nifty IT:

Nifty CMP:  22552.50
Nifty Potential Upside Target: 22700-22850 / 23000-23250 / 23800-23850 (As the case may be)
Nifty Immediate Target / Support: 22100-22200 / 21287-21500 (As the case may be)

Sensex CMP: 74332.58
Sensex Potential Upside Target: 75000 / 77000 (As the case may be)
Sensex Immediate Target / Support: 72600 / 70000-71000 (As the case may be)

Bank Nifty CMP:  48497.50
Bank Nifty Hurdle / Immediate Target: 50000 / 51000-51500 (As the case may be)
Bank Nifty Immediate Crucial Support: 47500-47800 / 45000 (As the case may be)

Nifty Financial CMP: 23136.20
Nifty Financial Crucial Target: 24000
Nifty Financial Crucial Support: 22000-22850

Nifty IT CMP: 37820.45
Nifty IT Potential Upside Target: 40000
Nifty IT Immediate Target / Support: 36000

Stock on Radar:

Large Caps:

• Reliance Industries (CMP 1249): This large cap counter is the only key factor which could in its entirely lift up the markets. We have mentioned this in our earlier posts as well & this counter has been on our radar since subdued levels of below 1200. This counter looks good to add in portfolio at CMP 1249 & can be added more if comes back to 1200 with strict SL placed at 1100 one can look for a potential upside towards 1500-1600 in 3 months time frame.

• Jubilant Foodworks(CMP 603): This counter looks attractive to add on dips towards 580 with strict SL placed at 540 for a potential upside towards 650-750 in 2-3 months time frame.

• Asian Paints (CMP 2270): With crude oil cooling off this counter looks like can for bottom here somewhere within the range of 2183-2270 with strict SL placed at 2070 one can look for a potential upside towards 2552 in 3 months time frame.

• Colgate Palmolive (CMP 2474): This largecap FMCG counter looks like has formed a bottom here & looks good to add at CMP 2474 with strict SL placed at 2350 for a potential upside levels of 2672 in March itself.

• Hindustan Unilever Limited (CMP 2204): This large cap FMCG counter looks a safe haven in this volatility & can be added here at CMP 2204 with strict SL placed at 2100 for a potential upside towards 2500 in 3 months time frame.

About the Author:

Mr. Vishal Gupta a SEBI Registered Research Analyst is the founder of “VG STOCK RESEARCH”, founder of “THE ANALYSIS ROOM”, a writer & an advisor having rich experience in Indian Equity Markets who has spent years comprehending an industry wide shift and risk management with more than 12+ years exploring in depth analysis of the Equity & Derivatives with accuracy of 90% and above.

He has also been into teaching Fundamental Analysis for quite some time giving investors/traders comprehensive knowledge & skills of Indian Equity Markets.

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