Is bear market over? Nifty reclaims 23K – what’s next?

In a major relief to investors, Indian share market is experiencing buying momentum for the last four sessions, with the benchmarks BSE Sensex surging over 2,500 points and NSE Nifty reclaiming 23K level. With the equity benchmarks consistently breaching key resistance levels and foreign outflows stabilising, investors are wondering: Is the bear market officially over, or is this just a bull trap?

Indian benchmark indices - Sensex and Nifty50 - registered their biggest rally in nearly two months, thanks to strong recovery in broader market, with mid and small-cap indices rebounding up to 6% this week. On Thursday, the BSE Sensex ended 1.2% higher at 76,348, and the NSE Nifty rose 1.24% to reclaim 23,191 level. Technically, the benchmark indices successfully cleared the 50-day SMA (Simple Moving Average) level and the 23,000 and 75700 resistance zone, which is largely positive.

This surge is driven by a combination of global and domestic factors such as the U.S. Federal Reserve's decision to maintain forecast of two rate cuts this year despite the ongoing tariff concerns, decline in foreign fund outflows, and attractive valuation after recent correction. However, continued uncertainty regarding U.S. President Donald Trump’s traffic policies and its impact on the global economies limited upmove.

What’s next for Indian equities?

With the Nifty50 decisively surpassing the 23,100 resistance and the banking index reclaiming its long-term moving average, the next target is now set at 23,400, says Ajit Mishra – SVP, Research, Religare Broking.

He further said that the stability in global markets and moderation in foreign institutional investor (FII) selling have significantly improved sentiment. “Notably, the recovery in banking and financial stocks, alongside strength in metal, real estate, and energy heavyweights, has played a crucial role in sustaining the momentum. Additionally, broader market participation and themes such as defense and railways have further eased pressure,” he added.

Throughout March, Nifty has maintained a bullish stance, considering the price placement at key support levels and oversold indicators. Now, with strong momentum and evolving price patterns, this rally is expected to continue in the near term, says Rajesh Bhosale, Equity Technical Analyst, Angel One.

From a technical perspective, the correction that began from Sept’24 peak of 26,277 saw every bounce getting sold into along a descending trendline. However, March 20 session’s decisive breakout above this trendline confirms a "Falling Channel" pattern. Additionally, the Relative Strength Index (RSI), a technical indicator that measures the price momentum of an asset, smoothened has crossed above 50 and is on the verge of breaking its previous swing high, signaling a shift in momentum toward the bulls, he added.

“The low-hanging fruits have already gone, and after such a sharp move, some consolidation or a slower pace is likely. Traders should avoid complacent bets, be selective, and use minor dips as buying opportunities,” he said.

Shrikant Chouhan, Head Equity Research, Kotak Securities, opines that the overall market sentiment is bullish, but buying on dips and selling on rallies would be the ideal strategy for day traders. In the near future, 23,100 and 76,000 and 23,000, and 75,700 or (the 50-day SMA) will be key support zones for Nifty and Sensex, while 23,300 and 76,500 and 23,400 and 76,800 could serve as key resistance areas for day traders.

“However, if the market falls below 23,000/75,700, sentiment could change. Below this level, traders may prefer to exit their long positions,” he said.

“With the Indian equities witnessing gains for the last four trading sessions; we expect the market recovery to continue in the near term, driven by continued buying interest and positive global cues,” Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services, said in a note.

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