Dated: 24/05/2025
It has been a pure taboo consolidation all over last week where once again Bull’s had nightmare thinking Bears have came back it eventually resulted in a mere consolidation with neither party wining the game eventually. The week started on a soft note where Nifty remained stagnant & tried to hold on to the 25000 level but failed to do so bears also tried their way to enroll the pass & take Nifty below 24400-24600 range but the attempt failed badly & Bulls closed the week with a tie.
Overall the week closed on a mere loss of 0.66% loss in Nifty & 0.74% loss in Sensex. However, Bank Nifty tried hard to pave the road ahead but failed & ended up with consolidation & mere 0.07% gain for the week. The US-India-Pak tri-lateral love triangle continues to create the issues in Make in India of Apple products & US – Europe uncertainty over the rates continues to create the loom.
As the US President Donald Trump mediated between India & Pakistan & announced a ceasefire between the two nations which so far took a permanent pause on the escalations of war situation along the LOC followed by continuous buying by FII’s in Cash & Derivatives front then Nifty may continue to have more potential to hit another high’s towards 25500-25600 in the coming week ahead while the crucial supports levels remains at 24400-24600 followed by 23900-24000 in case of any major pull back. Furthermore as the DXY (Dollar Index) dries up the lake below 100 easily the USDINR may soon hit 84 kinds of level which could trigger a positive flow for Bank Nifty & eventually the Nifty to scale up with more ease.
Furthermore Nifty overall fell 17.25% from the ATH of 26277.35 to make a low of 21743.65 & from those lower levels Nifty has now recovered nearly 15.55%. This sharp upmove was clearly indicated by us over several articles in last 5-6 weeks. Though Nifty delivered the losing streak after almost 28years where consecutively 5 months negative close has happened but with finally its 6th & now 7th month where positive recovery was seen & Bull’s rejoices we now have hope for a smooth but gradual recovery into the broader markets in the coming weeks ahead to continue.
FII’s & DII’s remained continuous buyer’s consecutively third month straight starting from March 2025 to so far in May 2025 (FII’s were net sellers last week)which resulted in joint buying of Rs. 19,700.79cr. by FII’s followed by Rs. 83,925.59cr. by DII’s whereas this is result of only Cash market data the FII’s also remain net longs on the derivatives front as well. In the coming week ahead the current flow in the markets may lead Nifty towards unprecedented levels of 25500-25600 kind of levels while the continuous positive inflow of FII & DII’s have created / shifted the crucial supports to the higher levels of 24400-24600 followed by 23900-24000 kind of levels where major weakness now only be witnessed if the Nifty moves below these levels. We have been consistently mentioning these positive data buildups since last 2.5 months as of now which now can be seen clearly.
This time not only broader markets witnessed a marvelous recovery but the dead portfolio’s of the investors also got revived & few heavy weight giants came back near to their respective ATH (All Time High) levels. FII’s have now turned net buyer’s which not only in derivatives segment but also in Cash segment which took a turn in last few trading sessions.
The Indian Equity markets have gained many recent news items where major of the news items are mentioned below:
-
For the first time in last June 2024 Weeks Rupee recovered to 83.667 per but rise again due to war escalation & hit 85.954 now stable near 85
-
RBI announces OMO Purchase of Government of India Securities from JAN – MAY 2025 Rs.2,60,000 cr. so far.
-
Continuous easing up of Dollar index & made low of 97.92 to now well settled near 99
-
Brent Crude tested low’s of 58.40 but now recovering stable near 64-65$
Record Dividend Transfer to Government of India:
-
To transfer 2.69 trillion rupees as surplus to government for FY25
-
Highlights of the revised economic capital framework of the reserve bank of India approved by the central board
-
No surplus will be transferred to the government till at least the minimum level of required realized equity is achieved
-
Range for buffers for monetary and financial stability risks has been winded to 5.0 ±1.5% of balance sheet
-
Contingency risks buffer set at 7.50% for FY25
FII’s so far since October 2024 to till 2nd Week of March 2025 remained on the Net sell side with significant sell off & putting significant pressure on Indian domestic markets & had no 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. 3,07,360.09 crore combined of October, November, December, January, February, March, April & May 2025. On the contrary DII’s were the main supporters of the entire Indian domestic Equity Markets with whopping buying of Rs. 4,03,192.39 cr. since the beginning of October 2024 & in the Calendar year 2024 they have bought more than Rs. 5.26 Lacs cr. & Rs. 2.25 lac crore approx. so far in 2025.
On the other side FII’s net longs have once again fell toward 32% which may again increase towards 45% almost which has improved significantly from @15-18% & we have consistently been mentioning this to improve lastly which continuously signifies & has now possible bottom formation 21700-22000 which indeed has turned the game & bottom was formed in Nifty. Now we expect the FII’s long positions to rise further towards 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):
-
For the first time in last June 2024 Weeks Rupee recovered to 83.667 per but rise again due to war escalation & hit 85.954 now stable near 85
-
RBI announces OMO Purchase of Government of India Securities from JAN – MAY 2025 Rs.2,60,000 cr. so far.
-
Continuous easing up of Dollar index & made low of 97.92 to now well settled near 99
-
Brent Crude tested low’s of 58.40 but now recovering stable near 64-65$
-
Co to commission batteries, micro power electronics GIGA Factories next year|| Co also start solar PV modules GIGA Factory this year
-
India told IMF that Pakistan arms purchase spikes with every IMF loan
-
India to push FATF to put Pakistan in grey list
-
India FX reserve, USD actual; 685.73B vs 690.62B previous
International news:
-
Continuous easing up of Dollar index & made low of 97.92 to now well settled near 99
-
Brent Crude tested low’s of 58.40 but now recovering stable near 64-65$
-
Trump unveils USD 175billion Golden Dome missile defense plan for US
-
Many countries like Brazil, Argentina, Saudi Arabia, are reportedly lining up to buy the BrahMos missiles, but India need Russia permission to sell.
-
Iran doesn’t believe a nuclear deal is likely, sources say, as talks with us set to resume
-
Pakistan will pay price for every terror activity they have committed: PM Modi
-
Pakistan will not get water to which India has a right: PM Modi
-
Trump Says:
-
European union has been hard to deal with on trade
-
Recommends 50% tariff on the European union, starting on june 1
-
No tariff if the product is build or manufactured in the united states
In the institutional segment the FII’s turned net sellers with net outflow of Rs. 11,591 cr. & the DII’s remained net buyer with net inflow of Rs. 11,199.01 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 & we have now successfully formed a good bottom at 21700-22000 supported by DII’s massive buying as monthly retail SIP data remains near Rs.26,632 cr. p.m. rose significantly.
Nifty last week made high’s of 25062.95 to give a close at 24853.15. In the coming week ahead the current flow in the markets may lead Nifty towards unprecedented levels of 25500-25600 kind of levels while the continuous positive inflow of FII & DII’s have created / shifted the crucial supports to the higher levels of 24400-24600 followed by 23900-24000 kind of levels where major weakness now only be witnessed if the Nifty moves below these levels. We have been consistently mentioning these positive data buildups since last 2.5 months as of now which now can be seen clearly. This time the support may continue to continue to come from Banking & “IT Sector” followed by heavy weights like Reliance etc.
Sensex made high last week at 82422.56 to give a close at 81721.08. In the coming week ahead the major expected potential upside continues to remain towards 83400-84000 mark while the crucial supports have further shifted higher within the defined range of 80000-81000. This time the support may continue to come from Banking & “IT Sector” followed by heavy weights like Reliance etc.
The Bank Nifty is all set for another ATH (All Time High) to hit 57000 with crucial support shifting higher within the defined range of 54000 kind of levels.
Meanwhile Nifty Financial Services may now head for 27000-27500 kind of level while crucial support now remains at 26000.
The “Nifty IT” has completed our immediate upside target of 38000 kind of levels by making high’s of 38375.55 to give a close now at 37403.55 where major heavy weights shown heavy buying from the low’s. Moving ahead “Nifty IT” we may now get 40000 kind of levels till the end of June 2025 series while crucial supports have shifted higher within the range of 35000-36000 kind of levels with major heavy weight like TCS Infosys & Wipro continued to remain into focus for the moves ahead.
As of February 2025 the number of Demat Accounts has declined to whopping 19cr. this not only helps the capital markets directly but also directly to Equity investments.
The monthly SIP in Indian markets now remains almost stable at Rs. 26,632 cr. per month.
Brief Levels of Nifty / Sensex/ Bank Nifty / Nifty Financials / Nifty IT:
Nifty CMP: 24853.15
Nifty Potential Upside Target: 25500-25600
Nifty Immediate Support: 24400-24600 / 23900-24000 (As the case may be)
Sensex CMP: 81721.08
Sensex Potential Upside Target: 83400-84000
Sensex Immediate Support: 80000-81000
Bank Nifty CMP: 55398.25
Bank Nifty Immediate Target: 57000
Bank Nifty Immediate Support: 54000
Nifty Financial CMP: 26485.40
Nifty Financial Immediate Target: 27000-27500
Nifty Financial Immediate Support: 26000
Nifty IT CMP: 37403.55
Nifty IT Potential Upside Target: 40000
Nifty IT Immediate Support: 35000-36000
Stock on Radar:
Large Caps:
-
Power Grid Corp (CMP 298): This large-cap PSU counter looks for a poised breakout above 306 one can accumulate here at CMP 298 with strict SL placed at 260 one can expect a potential upside towards 335-345 kind of levels in 1 month time frame.
-
Voltas (CMP 1261): This large-cap counter looks like downside almost is over & can be accumulated here at CMP 1261 with strict SL placed at 1100 one can expect a potential upside towards 1600 in a month time frame.
-
Wipro (CMP 247): This large-cap IT counter looks good to accumulate here at CMP 247 with strict SL placed at 220 for a potential upside towards 270-275 kind of levels till May 2025 end.
-
RECL (CMP 402): This large-cap PSU counter looks good to accumulate here at CMP 402 with strict SL placed at 375 for a potential upside towards 460 in no time
Mid-Cap:
-
Birla Soft (CMP 425): This mid-cap IT counter looks like has given a good breakout one can accumulate here at CMP 425 with strict SL placed at 399 for a potential upside towards 550 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 13+ 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.
Email I’d: contact@vgstockresearch.com
Contact: +91-9953934544
Website: https://vgstockresearch.com/
SEBI Reg. No.: INH100007985