'Abhi Nahi Toh Kabhi Nahi': InCred Equities gives 27,000 target for Nifty50 in next 12 months

'Abhi Nahi Toh Kabhi Nahi': InCred Equities gives 27,000 target for Nifty50 in next 12 months

InCred Equities has projected a 27,000 target for Nifty50 over the next 12 months, citing technical indicators that suggest a base formation in the index after recent correction.

The benchmark indices staged a strong rebound on Wednesday, with the Sensex surging 740.30 points or 1.01 percent to close at 73,730.23. The index hit an intra-day high of 73,933.80, gaining 943.87 points or 1.29 percent. The Nifty snapped a 10-day losing streak, rising 254.65 points or 1.15 percent to settle at 22,337.30. During the session, it touched a high of 22,394.90, up 312.25 points or 1.41 percent.

The brokerage has given a stop loss of 21,000 on closing basis and also said Nifty 500 stocks are in extreme oversold zone.

Nifty has undergone a sharp correction from the 26,000 level, with several stocks seeing significant declines. However, the index is now approaching multiple support zones, suggesting a possible turnaround. According to InCred Equities' report titled "Abhi Nahi Toh Kabhi Nahi", Nifty is nearing the 38.2 percent Fibonacci retracement level from the June 2022 lows, which coincides with the 120-exponential moving average (EMA) support on the weekly chart.

"Historically, Nifty has taken strong support and reversed from the 120-week EMA and 500-day EMA," said Gaurav Bissa, Vice President at InCred Equities. He added that the index is also nearing an ascending channel support on both the weekly and monthly charts, which could act as a cushion against further declines.

Further technical indicators, including the bearish Ichimoku C-Clamp pattern on the monthly chart, point to the possibility of Nifty finding support near the Kijun line, Bissa noted.

"As per Elliott Wave Theory, Nifty appears to be completing a smaller wave (4), which is likely to be followed by an upward move towards 27,000 levels to complete wave (5)," he said. Alternative wave counts suggest the possibility of Nifty completing wave 2, which could lead to even higher targets.

Bissa expects a time correction in the index over the next few months, with a strong upward move likely to begin from June 2025. "At current levels, Nifty presents a compelling buying opportunity for investors with a 9 to 12-month horizon," he said.

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