Analysts remain bullish on the road ahead for the equity markets, but warn against volatility on account of domestic and global cues.
The upcoming Lok Sabha elections back home and the interest rate trajectory of the US Federal Reserve, they said, will be the two most important factors that the markets will keep a tab on.
That apart, the valuation of the Indian markets, they feel, will also be eyed in context of how global peers are performing.
“We remain positive on the overall equity markets for fiscal 2025 (FY25) considering structural stories of economic growth and the entry of new investors (into the markets).
"The Sensex can give at least 15 per cent return in FY25 in line with long-term trend.
"Considering relative valuations, we suggest an equity asset allocation of 50:50, – 50 per cent towards top 100 market-cap stocks, and the balance 50 per cent for large mid-cap and small-cap stocks,” said G Chokkalingam, founder and head of research at Equinomics Research.
Any macro risk factors (geopolitical situation, disappointment as regards monsoon back home and any delay in the rate cut by the US Fed), he said, can see the Sensex give a return in poor single digits, or it might even stagnate in FY25.
From a technical perspective, the market has formed higher lows on daily and intraday charts, and a long bullish candle on weekly charts which is largely positive.
For trend-following traders, Shrikant Chouhan, head of equity research at Kotak Securities said, the 20-day Simple Moving Average (SMA) or 22,200 (Nifty) / 73,200 (Sensex) would be the decisive level.
"As long as the market trades above it, the bullish sentiment will remain intact.
"At higher levels, the indexes may find resistance near 22,530-22,550/ 74,250-74,300. Crossing the level of 22,550/ 74,300 could help the Nifty/ Sensex achieve the level of 23,000/ 76,000 in the near term with minor resistance at 22,650/ 74,750 and 22,850/ 75,300," Chouhan said.
Here are the key levels you need to track as regards frontline indices in FY25:
Sensex: As per the yearly Fibonacci chart, the BSE Sensex can potentially target 77,000-mark on the upside, with interim resistance seen around 75,600 levels.
On the downside, the BSE benchmark may seek support around 70,250 levels, violation of the same can trigger a slide to 67,750 levels.
Nifty: Even as the broader trend for the Nifty remains positive, the index is seen trading in fairly overbought zone, with key momentum oscillators such as the Stochastic Slow showing some signs of tiredness.
Going ahead, the Nifty may target 23,500 on the upside, with interim resistance seen around 22,900 levels.
On the downside, near support is seen at 22,000-mark, whereas breach of 21,700 levels can trigger a substantial correction in the market.
Nifty Bank: The banking benchmark may swing the range of 51,000 - 44,500; with resistance seen around 49,200 and 50,000-mark, while support expected around 46,000 levels.
Nifty IT: The Nifty IT index is seen struggling below its 100-DMA on the daily time-frame, which stands at 35,400 levels.
The upside for the index seems capped around 37,300 levels, whereas on the downside, the IT index can slide towards its 200-DMA at 33,100 levels, below which a dip to 31,500 levels seems likely.
Midcap: The Nifty MidCap needs to sustain consistently above 48,000-mark, in order to reverse the recent negativities.
On the upside, break above 51,700 levels with usher renewed strength for the bulls.
Smallcap: The Nifty SmallCap needs to sustain above 7,100 levels, in order to potentially rally to 7,700 levels.
The long-term chart suggests that the index may face resistance above 8,000-mark.
On the flip side, the index can potentially slide towards the 6,000-mark.hart
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