The Indian stock market saw a significant upward surge last week, with benchmark indices rallying over 4%. This impressive performance is attributed to favorable global cues and sustained inflows from foreign investors. Among the sectors, banking stocks stood out, experiencing robust growth driven by easing consumer price index (CPI) data and optimistic forecasts regarding the monsoon season. These developments have heightened hopes for an extended cycle of interest rate cuts by the Reserve Bank of India, contributing to an overall positive sentiment in the market.

In a notable political development, U.S. President Donald Trump announced tariff exemptions for smartphones and computers while suggesting a possible pause on auto tariffs. This news injected further optimism into the market, leading Nifty to open on a strong note and maintain upward momentum throughout the week, closing near the 23,850 mark, up by 4.5%.

Bank Nifty also enjoyed remarkable success, closing the week just shy of its all-time high, with a weekly increase of 6.5%. The broader market mirrored this trend; both Nifty Midcap and Smallcap indices ended the week higher, climbing by 4.2% and 4.5% respectively. The formation of a sizable bull candle on the weekly chart, characterized by higher highs and higher lows, signals a continuation of this upward trend. Furthermore, the index formed a higher high on the monthly chart, indicating underlying strength.

Outlook for the Coming Week

Looking ahead, analysts expect the index to maintain its overall positive bias, gradually heading towards target levels of 24,200 to 24,300 in the upcoming weeks. These levels represent the highs from January 2025 and the 123.6% external retracement of the recent decline from 23,869 to 21,744.

However, market volatility may remain elevated due to ongoing tariff discussions and the progress of the Q4 earnings season. Any dips in the market during the coming week should be viewed as buying opportunities, with critical support resting at the 23,200 levels.

Nifty Bank Performance

Bank Nifty extended its winning streak for the fourth consecutive session, closing the week with impressive gains of 6.5%. The index is currently positioned near its all-time high and continues to outperform other segments of the market. It has witnessed a breakout above a falling channel that contained the previous decline, and has notably retraced five months of losses in just two months, indicating a robust market recovery.

Expectations suggest that Bank Nifty may aim for levels between 54,800 and 55,000 in the weeks to come. Additionally, the ratio chart of Bank Nifty to Nifty has shown a range breakout, signaling that this outperformance is likely to continue in the medium term. Investors are advised to consider dips in Bank Nifty as buying opportunities, with key support zones identified between 51,800 and 52,300, which correspond to the recent breakout area and the weekly gap up region.

Stock Recommendations

Jindal Steel

  • Target: Rs 1020
  • Stop Loss: Rs 820
  • Expected Return: 16%
  • Time Period: 3 Months

Jindal Steel appears to be bottoming out near the demand zone of 835-850, indicating accumulation at these levels. The stock is set for a potential breakout from a falling channel pattern, signaling a change in trend dynamics. The price action has reclaimed both the 21-EMA and 50-EMA, currently positioned at 865 and 875, respectively, showcasing bullish undertones. Additionally, a daily RSI crossing above the equilibrium level of 50 indicates a resurgence in buying momentum.

Reliance Infra

  • Target: Rs 305
  • Stop Loss: Rs 240
  • Expected Return: 17%
  • Time Period: 3 Months

Reliance Infra is currently trading above key moving averages and rebounded from the lower boundary of a falling channel, indicating a potential reversal. The stock has been consolidating within the 220270 price range, and closing above its 21-week EMA at 256 reinforces its bullish sentiment. A breakout above the immediate resistance zone could trigger a new upward movement towards the target price of 305 levels.

Disclaimer: The opinions, analyses, and recommendations presented in this article are derived from brokerage sources and do not reflect the views of The Times of India. Investors are advised to consult with a qualified investment advisor or financial planner before making any investment decisions.

According to Bajaj Broking Research, Jindal Steel and Reliance Infra are considered top stock picks for the upcoming trading day. The recommended buying range for Jindal Steel is between Rs 870-884, while Reliance Infra should be considered within the range of Rs 255-265.