India’s equity markets continued their upward momentum for the seventh consecutive session on Wednesday, displaying a strong, positive trend across the broader market. As reported by Axis Securities, over 80% of stocks in the NSE500 index closed above their 50-day moving average, a technical indicator historically linked to broad-based positive momentum.
Axis Securities highlighted that such a level of market breadth has been observed 41 times in the last decade. In 75% of these instances, the NSE500 index experienced gains over the subsequent 20 trading days, with an average return of 2.8% in successful cases and an average loss of 2.0% in others. The overall average return amounted to 1.6%.
According to Axis Securities, this shift indicates a positive turn in price action and investor sentiment across a wide range of stocks, not just the major index constituents. The brokerage suggested that this time might be opportune for investors to reassess their strategies or bolster their existing successful positions, especially with the emergence of breakout opportunities in the broader market.
This bullish technical signal emerged amid ongoing gains in Indian equities. On Wednesday, the benchmark BSE Sensex increased by 520.90 points, or 0.65%, closing at 80,116.49, surpassing the 80,000 mark for the first time since the recent correction. The broader Nifty 50 index also rose 161.70 points, or 0.67%, to close at 24,328.95.
Both the Sensex and Nifty have climbed over 8% in the past seven sessions, propelled by renewed foreign institutional investment and reducing global trade concerns. Investor optimism has also been fueled by expectations that U.S. tariffs under the Trump administration will not negatively affect Indian exports.
Despite the current bullish sentiment, some technical indicators are beginning to show early warning signs. Rupak De, Senior Technical Analyst at LKP Securities, remarked that the Nifty exhibited volatility after an optimistic start, supported by positive global cues.
De observed that a Hanging Man candlestick pattern has formed on the daily chart, often signaling caution during an uptrend. Additionally, the Relative Strength Index (RSI) is nearing a potential negative divergence. He pointed out that if the Nifty drops below the 24,300 level, it could correct toward the 24,000–23,900 zone. Conversely, resistance is anticipated near the 24,450–24,500 range.
While the short-term trend remains positive, Axis Securities advised investors to closely monitor their positions and seek breakout opportunities amid the broad market strength. The current setup, reinforced by historical data, suggests momentum may continue, although caution is advisable as key resistance levels come into play.
(Disclaimer: The recommendations, suggestions, views, and opinions of experts are their own and do not represent those of The Economic Times.)
