In the past week, the 26,145 level was considered the first support, and if that was breached, the support zone between 26,042–25,896 was expected to act as the next major cushion. On the upside, a close above 26,265 was viewed as the first breakout level required for the bullish journey to continue.
Last week, after hitting a fresh all-time high of 26,325, the index corrected intraday to 26,175 and then extended the decline to 25,891 over the next two days. However, it did not break the important support zone mentioned earlier. From that region, the market began to rebound and by the end of the week climbed back to 26,202, finally closing at 26,186.
At the end of the week, the Reserve Bank reduced the repo rate and announced open market operations to inject liquidity. The market interpreted these actions as strong measures aimed at boosting economic growth.
Now let’s look at the key levels to watch in the coming sessions.
To maintain the bullish momentum, the index must move above and close above the 26,300 level, which is the first pressure zone. A close above this level will push the index toward the earlier projected targets of 26,502–26,987.
If the index fails to close above 26,300 and instead breaks below and closes under 26,061, it would indicate the possibility of a continued correction. In such a scenario, a deeper decline toward 25,551–25,318 may unfold.
At present, bulls still hold the advantage, and the probability of the 26,061 support holding remains higher.
The Metal, Services, Private Banks, PSU Banks, Consumption, Auto, and IT sectors continue to remain bullish.
The correction seen in midcap and small-cap stocks over the past year has now reached its final phase. Therefore, with the next leg of the market’s upward move, these segments also have a rising likelihood of witnessing renewed strength and fresh momentum.