The current market texture is bullish, and "buy on intraday dips and sell on rallies" would be the ideal strategy for day traders; It’s a broad-based rally with broader mid and small caps also posting strong gains while beaten down PSE, Energy and Infra stocks also staging a strong rebound post budget disappointment.
Shrikant Chouhan,
Head Equity Research,
Kotak Securities
Mumbai, February 4, 2025: Today, the benchmark indices witnessed a sharp bounce back, with the Nifty ends 378 points higher and the Sensex up by 1397 points. Among sectors, almost all major sectoral indices traded in positive territory, with the Oil and Gas and PSU Banks indices outperforming, gaining over 2 percent. Technically, after a gap-up opening, the market successfully cleared the 23,500/77800-resistance zone, and post-breakout, the positive momentum intensified. Additionally, a bullish candle on the daily charts and an uptrend continuation formation on the intraday charts indicate further upward movement from the current levels.
We believe that the current market texture is bullish, and "buy on intraday dips and sell on rallies" would be the ideal strategy for day traders. For traders now, 23,600/78100 and 23,500/77800 would be the key support zones, while 23,800/78700-23,850/78900 could act as key resistance areas for the bulls.
Satish Chandra Aluri, Lemonn Markets Desk, adds: Benchmark indices rallied sharply on Tuesday on easing global worries as investors looked forward to the upcoming RBI meeting on expectations of first rate cut in more than 4 years.
What we saw is a strong rebound driven by positive global and domestic cues. Pause in tariffs on Mexico and Canada eased global worries of trade war while domestic focus turned to RBI meeting, with markets expecting first rate cut in more than 4 years. Coming after strong push from govt to revive consumption (via tax relief), RBI is also widely expected to support growth revival by delivering the first rate cut of 25bps. RBI’s liquidity booster of ~1.5 lakh crore last week was widely seen a signal for upcoming rate cut and we are seeing strong rally in Financials led by banks in today’s session, in anticipation of rate cut.
It’s a broad-based rally with broader mid and small caps also posting strong gains while beaten down PSE, Energy and Infra stocks also staging a strong rebound post budget disappointment.
Nifty 50 opened strongly, and gains accelerated in the afternoon session with next resistance around the 23800 levels. Bank Nifty reclaimed 50k level on RBI rate cut hopes with next resistance around 50200, while on the downside 49500 can act as immediate support.
