Source: Equentis.com
The Nifty 50 index crossed its long-term 200-day moving average (200-DMA) for the first time since January 6 during intra-day trading on Monday, April 21, 2025, in a significant technical milestone. The index touched a high of 24,188, an intra-day gain of 1.4% or 332 points. This comes after a robust rally during which the Nifty gained more than 11%—or almost 2,400 points—in just eight trading sessions.
Positive Momentum Signals in Technical Indicators
The recent rise has helped the Nifty overcome and breach a few major technical levels. It first broke its short- and medium-term moving averages, the 20-DMA at 23170 and the 100-DMA at 23400, respectively, before breaking the long-term 200-DMA currently at 24051. On a technical level the momentum is still building.
The Nifty has created a bullish candle on the weekly tally that sustains the daily uptrend, said Shrikant Chouhan, Head of Equity Research, Kotak Securities. He suggests a buying range of 23,650 and 23,550 with a closing stop loss at 23,500.
“The overall market texture is bullish. For traders, the levels of 23,500 (Nifty) / 77,400 (Sensex) would act as key support zones, while resistance zones are between 24,000/79,000 and 24,200/79,600. However, if the market moves below 23,500/77,400, the sentiment could change, and the indices may fall to 23,350/76,900 or 23,200/76,500, where the market has left a bullish gap,” Chouhan suggests.
What’s Fuelling the Rally?
Not all evidence of technical strength, the current market rally is also being propelled by strong runs in the financial sector. HDFC Bank and ICICI Bank, both of which announced their respective March 2025 (Q4-FY25) earnings last week, are leading the charge. The results renewed optimism in the finance segment, with the Nifty Bank index gaining 2 percent in intraday trade. Importantly, the index broke its all-time high of 54,467.35, reached on September 26, 2024, indicating renewed investor confidence in the banking space.
Broader Catalysts and Outlook
Beyond domestic triggers, global factors are also playing a role. Analysts see growing optimism around a possible India–US trade agreement, which, along with India’s improved readiness to benefit from global supply chain shifts, is lifting sentiment. Economists at Nomura believe that the worst of the global tariff and trade war pressures are likely behind us, except for potential sector-specific duties such as on pharmaceuticals.
“We expect the Nifty to trade in the range of 17-20x one-year forward earnings, and reset March 2026 Nifty target at 24,970 based on 19.5x FY27F Nifty EPS of Rs 1,280. In case of a stable risk environment, we expect FII flows to be supportive after the intense sell-off in the past six months. Assuming a valuation range of 17-20x, we expect market return of -9% to +7% over the next one year,” written by Saion Mukherjee, managing director and head of equity research for India at Nomura in a recent co-authored note with Amlan Jyoti Das.
Conclusion
Breaking above its 200-DMA is a bullish signal for the Nifty, underpinned by both technicals and fundamentals. And with heavy-hitting financiers fuelling the momentum and around-the-world invariance being in an upbeat stance, it seems that a potential uptrend is on the cards that could quite likely continue for some time. However, caution remains key. Traders and investors need to keep a close watch on supports and be on the lookout for shifts in sentiment if key technical thresholds are broken. The fundamental tests over the next several weeks will determine if this price action morphs into a real bull run.
