Markets Will See A Comeback If Nifty Sustains Above 21,450, Say Analysts

The benchmark stock indices, after having lost nearly 3% in the last three sessions, may see a bounceback if the current support levels are sustained, according to analysts.

Nifty and Bank Nifty are now trading near their support levels of 21,450 and 45,400, respectively, and if they sustain at these levels, there will be some relief rally, according to Gaurav Bissa, vice president, InCred Capital Financial Services Pvt.

The current levels cannot be a bottom, and a bounce back in the markets cannot be ruled out, Bissa said. "We have seen that the relative strength index in lower time frames is in an extremely oversold zone."

"Tomorrow, if the markets sustain above 21,500 for Nifty and 45,500 for Bank Nifty, we may see some upside towards 21,800–21,850 in the coming days," he said.

Since Nifty has slipped below its 20-day EMA, placed at 21,580, from a short-term perspective, the next support is likely to be seen at 21,300, according to Sudeep Shah, deputy vice president and head of technical and derivative research desk, SBI Securities Co. "In the event that 21,300 is breached, the index could slide towards 21,160 on the downside."

Benchmark Indian indices continued their losing streak for the third consecutive day due to a fall in shares of HDFC Bank Ltd. and LTIMindtree Ltd. after their third quarter results. The Nifty 50 closed 106.70 points, or 0.49%, lower at 21,465.25, and the Sensex fell 313.90 points, or 0.44%, to end at 71,186.86.

Infrastructure and the auto/two-wheeler sectors should continue to perform well in 2024, according to Vinit Bolinjkar, head of research at Ventura Securities Ltd. "The segment had seen a slowdown after Covid, but the cycle is now picking up, and we believe that this has legs for another two years."

The pharma sector will post encouraging quarterly numbers with decent volume growth. It will see a compounding effect play out, and GSK Ltd. can be an outlier in this segment, Bolinjkar said.

HDFC Bank Ltd. will be a good buy, despite the recent downturn, for long-term investors, according to Gaurav Bissa. "The company looks extremely positive (in the long term) ... and the intensity of the fall will not be that high going forward," he said.

The quarterly earnings announcement of Reliance Industries Ltd. on Friday will be encouraging and will help shore up market sentiment, Bolinjkar said.

The markets will remain rangebound until March and will pick up steam beyond that, provided the global scenario doesn't deteriorate, he said. "We remain very bullish on the Indian markets. The growth story is still to play out."

Disclaimer: The views and opinions expressed by the investment advisers on NDTV Profit are of their own and not of NDTV Profit. NDTV Profit advises users to consult with their own financial or investment adviser before taking any investment decision.