Does the 5-day market rally have more legs? D-Street party can extend if Nifty stays above 23,800, say experts

Sensex, Nifty surged more than 1 percent on Monday, registering their fifth day of rally on the back of buying in banking and IT shares.

The domestic equity gauges Sensex and Nifty extended their winning run for the fifth straight session on Monday, with both the frontline indices surging over 1 percent, led by gains in banking and IT stocks amid strong quarterly earnings and sustained foreign fund inflows.

Sensex climbed 855.30 points or 1.09 percent to settle above the 79,000 mark at 79,408.50. It touched an intraday high of 79,635.05, rising as much as 1,081.85 points. The broader NSE Nifty rallied 273.90 points or 1.15 percent to close at 24,125.55.

23,800 level - key level to watch

"The Nifty has finally broken out of the key hurdle at 23,800 after two months of consolidation. This opens up room for a move towards 24,250 initially, followed by 24,600," said Ajit Mishra, Senior Vice President – Research, Religare Broking.

Echoing the sentiment, Rupak De, Senior Technical Analyst at LKP Securities, said the index has given a clear breakout above its previous swing high on the daily chart, reflecting growing investor optimism.

“With Nifty now trading above the critical resistance of 24,100, it appears well positioned to move towards the 24,450–24,500 zone in the short term. On the downside, immediate support is seen at 23,850,” he added.

In its latest note, Bajaj Broking said the index is now testing the immediate resistance zone of 24,200–24,300, which aligns with the January 2025 high. A sustained move above this band could lead to further gains towards 24,550 and 24,850 in the coming sessions.

“The index holding above Monday’s gap area of 23,850–23,903 will keep the near-term trend positive. Dips, if any, should be used as buying opportunities,” the brokerage said, adding that key short-term support is pegged near 23,200.

The Nifty’s latest breakout above 24,000 — achieved on its third attempt in the last three months — also lifted sentiment in banking stocks, helping the Bank Nifty hit a fresh all-time high.

Bajaj Broking pointed out that the Bank Nifty index has broken out of a broad seven-month range between 54,450 and 48,000. “It has also retraced the five-month correction in just two months, indicating renewed strength,” the brokerage said.

Analysts expect the Bank Nifty to head towards the 56,000 mark, with the recent breakout zone of 54,000–53,500 now likely to act as a strong support in the near term.

Further, the Bank Nifty/Nifty ratio chart has also moved out of its consolidation range, suggesting continued outperformance of banking stocks over the broader market.

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