Metals outperform peers; technical charts point to strength ahead

The Nifty crossed the 24,700 mark in early trade, but the Bank Nifty lagged, managing to stay just about in the green. Market experts, however, remain confident that the banking index will soon join the rally.

Speaking to ET Now, Dharmesh Shah highlighted that the strong momentum in Nifty was fueled by better-than-expected GDP growth of 7.8%, robust GST collections, and steady auto sales data. “The Nifty was into oversold territory, and what we are seeing now is a technical pullback from recent lows. Going forward, we believe the market should look for a target of around 25,000 on the Nifty. Strong support remains at 24,200, which is the 200-day moving average,” Shah said.

On the Bank Nifty, Shah noted that the index has historically found support at its 52-week exponential moving average. “Since April 2022, there have been five instances where the Bank Nifty found support at its 52-week EMA after corrections of 7–10%. Currently, it has already corrected 8% from the top, and the 52-week EMA is around 53,000. We expect Bank Nifty to find strong support in the 53,000–53,500 range and then post a 5–6% upside. It may be in consolidation now, but this is a good accumulation zone,” he told ET Now.

Metals Shine Amid Market Volatility

The metals pack also stood out, showing resilience in the corrective phase. Shah pointed out that while many sectors have struggled, metals have fared better on a relative basis. “The metal index seems to be finding strong support at its 200-day exponential moving average. Tata Steel remains our top pick, as it is forming a higher base above its 200-day average and finding support at the lower end of its rising channel. We expect Tata Steel to head towards ₹173 with a stop loss at ₹149,” Shah explained.

He added that the broader trend in the dollar index could further support the sector. “Historically, metals have had an inverse correlation with the dollar index. The chart indicates that the dollar index is on the verge of a breakdown below 96 in the coming weeks, which could augur well for the entire metal space,” Shah told ET Now.

With domestic growth indicators improving and technical support levels holding firm, analysts believe both Nifty and Bank Nifty are poised for steady gains in the near term, while metals could continue to provide trading opportunities for investors.