Sensex, Nifty poised for a flat start; Check key levels to watch on May 27

Foreign institutional investors (FIIs) net bought equities worth Rs 135 crore on May 26, and domestic institutional investors (DIIs) continued providing support to the market with a net purchase of Rs 1745 crore

Benchmark indices Nifty and Sensex are set for a muted-to-positive start on Tuesday, May 27, as suggested by GIFT Nifty, which signals that the Nifty 50 could open above 25,037. The market has logged gains for two straight sessions, extending its recent upward momentum.

In the previous session, the frontline indices surged as much as 400 points buoyed by gains in auto, IT, and metal stocks. However, profit-booking emerged at higher levels after the Sensex surged nearly 600 points intraday.

Investor sentiment was supported by recent headlines of India emerging as the world’s fourth-largest economy and the Reserve Bank of India’s record dividend payout, which is expected to ease fiscal pressure.

Foreign institutional investors (FIIs) net bought equities worth Rs 135 crore on May 26, and domestic institutional investors (DIIs) continued providing support to the market with a net purchase of Rs 1745 crore, provisional data from the NSE showed. For the year so far, FIIs have been net sellers of shares worth Rs 1,20,858 crore, while DIIs have net bought Rs 2,43,868 crore worth of shares.

Here are the key levels to watch out for in today's session

"Technically, Nifty formed a bullish candle on the daily chart, indicating strength. However, the index is still placed near the psychological resistance level of 25,000. A sustainable move above 25,000 could drive the Nifty towards 25,200–25,250 levels in the short term. On the downside, 21-Day Exponential Moving Average (21-DEMA) support is placed near 24,530. As long as the index holds above this level, a buy-on-dips strategy should be adopted," said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment.

Sensex has respected the important 20DMA zone of 80,980 level, where it has taken support during the intraday session and witnessed a decent pullback to improve the bias, expecting to maintain the trend intact in the coming sessions. As mentioned earlier, the index would have a psychological base near the 80,000 zone while the crucial support would be positioned near the 80,500 level, which needs to be sustained.

"The index holds firmly above all key moving averages, indicating short-term support remains intact. The 20-day simple moving average, currently at 54,980, may act as immediate support in case of any minor pullback. The RSI is now at 60, momentum appears to be building, though there's still headroom before overbought levels are tested. MACD continues to hover in negative territory, but the narrowing gap between the fast and slow lines points to a potential shift in momentum.A sustained close above 55,700 could push the index higher, with scope to retest the all-time high near 56,100," Samco Securities said.

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