Trade Setup for March 25: Nifty Eyes 23,800 and 24,200 after a strong six-day rally

The Nifty has continued its bullish momentum, surpassing the key resistance level of 23,600. As the index maintains strength, it is poised to target the higher levels of 23,800 and 24,200, provided it remains above the support level of 23,500.

Market Overview: The Indian equity markets have extended their bull run, marking a six-day rally, the longest since September 2024. The market opened with an upside gap and continued to climb for most of the session. Although a minor consolidation occurred later, the Nifty closed near its session highs.

Key Highlights:

The Nifty and Sensex surged past important levels, reaching their highest in two months.

Nifty has turned positive for the year, climbing 1,700 points from its March 4 low of 21,964.

Over 25 Nifty stocks are now positive year-to-date, with financial stocks being major contributors to the gains.

The broader market also saw sustained buying interest, with the Nifty Midcap 100 and Smallcap 100 indices rising 1.3% and 1%, respectively.

BSE-listed companies saw a market capitalization increase of over ₹35 lakh crore in March, recovering nearly 40% of the market cap loss from September 2024 to February 2025.

Public sector undertakings (PSUs), particularly in the defence sector, have been among the biggest gainers, with stocks like Hindustan Aeronautics, Bharat Dynamics, and Garden Reach Shipbuilders surging up to 35% in March.

Market Sentiment: The recovery in the Indian market is being driven by the return of FII inflows after a prolonged period of selling. Positive global cues have further supported market sentiment, with optimism that India could benefit from potential tariff adjustments by the US, set to take effect on April 2.

Outlook for the Nifty: The positive trend for the Nifty is expected to continue, driven by strong buying interest, improving FII flows, a strengthening INR, and overall global market support. According to Siddhartha Khemka of Motilal Oswal, the upward momentum should persist in the near term.

Veteran investor Ramesh Damani believes the Indian stock market is in the midst of a sustained bull run, with PSUs driving the market due to improved corporate governance and earnings. He remains bullish on certain PSU construction and defence companies.

What Nifty 50 Charts Indicate: Nagaraj Shetti of HDFC Securities notes that the Nifty's underlying trend remains positive. The next upside targets are 23,800 and 24,200. The index has breached the resistance level of 23,600 and continues to sustain above the 50 EMA. As long as the Nifty stays above 23,500, the momentum will remain strong. A fall below 23,500 could trigger a minor correction.

Stocks to Watch on March 25:

Restaurant Brands Asia will open its QIP on Monday, setting a floor price of ₹62.32 per share.

Ajit Pratap Singh joins Sterling & Wilson Renewable as CFO starting March 24, 2025.

Hitachi Energy India shareholders have approved a resolution to increase the company’s borrowing powers.

Disclaimer: Always consult certified experts before making investment decisions.