Ahead of Union Budget 2025 today, benchmark stock indices Sensex and Nifty recorded 1 per cent gains on Friday, with anlaysts noting that every small dip was quickly bought into, showing the dominance of the bulls.
Osho Krishnan of Angel One said as traders approach the special Budget session on Saturday, and considering the anticipated trade tariffs from the US government ahead, it is important to acknowledge the current market uncertainty. “We expect to gain clearer insights once these events unfold, likely by next week. In the meantime, it’s beneficial to adopt a flexible approach and focus on strategic opportunities rather than making aggressive bets during the special trading session of the Union Budget,” he said.
For Nifty, this analyst expects the 20-DEMA around 23,400-23,350 will be seen as intermediate support, but warned that investors must be prepared for wild swings.
“Additionally, strong foundational support appears to be positioned around the 23,100-23,000 zone, followed by the lower band of the ‘Falling Wedge’ around 22800, which one must keep in mind if things go haywire. On the flip side, the upper band of the ‘Falling Wedge’ near 23,800, followed by 200 SMA at 24,000 is likely to serve as key hurdles and a decisive surpass on a closing basis, is highly likely to form a short term bottom for the markets,” he said.
While the long awaited market correction is underway for the last 126 days, foreign brokerage Jefferies expects Nifty to bottom out before February 7, assuming there is no tax-surprise in the Union Budget 2025. It sees rate-sensitive stocks to do well in the expected near-term rally. Jefferies said the recent correction was the second longest of the 10 corrections in the last 10 years. At 15 per cent, the current correction is in line with the average corrections, it said.
Dhupesh Dhameja, Derivatives Analyst, SAMCO Securities said consistent buying on dips underscores the strength of the bulls, and as long as Nifty sustains above 23,300, the prevailing momentum is likely to persist. Additionally, a close above the 20-day EMA and the RSI surpassing 50 indicate a resurgence in positive sentiment while minimizing downside risks, he said.
“The 23,300–23,350 zone serves as a crucial support backed by put writers. As long as Nifty stays above 23,300, buying opportunities are expected to emerge, favouring a “Buy-on-Dips” strategy. A decisive move above 23,550 could accelerate the rally, setting the stage for further gains in the upcoming sessions,” Dhameja said.
Nifty has to hold above 23,350 zones for an up move towards 23,700 and 23,800 level, said Chandan Taparia of MOFSL. He sees supports at 23,350 and 23,100 levels.
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