Stock market strategy: Experts see Nifty50 at 27K peak by end of FY26. Here’s why

Indian stock market: Brokerage firm InCred Equities has set a 12-month target of 27,000 for Nifty50, highlighting technical indicators that indicate a base formation in the index following a recent correction.

“The rsi is hovering around 21 and a move below 20 levels is likely to result in a sharp reversal. The index is likely to witness a time correction for the next few months and a strong upside is expected to start from June 2025. However, current prices make a compelling case for buying nifty for the next 9-12 months,” InCred Equities said in its report titled “Abhi Nahi Toh Kabhi Nahi”.

The brokerage has set a stop-loss at 21,000 on a closing basis and noted that Nifty 500 stocks are currently in an extremely oversold zone.

“Currently, the ratio is at the one of the lowest levels and such extreme zones have resulted in base formation in the index in the past. There were only two instances when the ratio was lower than the current level, one was during Covid crisis and other during subprime crisis, both of which were black swan events,” the brokerage firm added.

Nifty has experienced a steep decline from the 26,000 level, with many stocks facing notable losses. However, the index is now nearing multiple support zones, indicating a potential reversal.

According to InCred report, Nifty is approaching the 38.2% Fibonacci retracement level from the June 2022 lows, aligning with the 120-exponential moving average (EMA) support on the weekly chart.

On Wednesday, the benchmark indices made a strong comeback on Wednesday, with the Sensex jumping 740.30 points (1.01%) to close at 73,730.23. It reached an intra-day high of 73,933.80, gaining 943.87 points (1.29%).

Meanwhile, the Nifty ended its 10-day losing streak, climbing 254.65 points (1.15%) to settle at 22,337.30. During the session, it peaked at 22,394.90, marking an increase of 312.25 points (1.41%).

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According to stock market experts, Nifty50 has formed a strong bull candle with a higher high and higher low, indicating buying demand emerging for the second session from the 22,000 levels.

“We anticipate the current pullback to extend toward the 22,500 level, which corresponds to the gap down area from February 28, 2025. Overall, the index is expected to consolidate within the range of 21,700 to 22,500 in the upcoming sessions. Key support levels are identified between 22,000- 21,700, as this range. For a reversal of the short-term corrective trend, the index needs to consistently form higher highs and higher lows,” said brokerage firm Bajaj Broking Research.

Meanwhile, Ajit Mishra – SVP, Research, Religare Broking Ltd, recommends investors to maintain a stock-specific approach. “While the rebound is encouraging, traders should avoid reading too much into a single-day bounce and wait for further confirmation. On the benchmark front, Nifty may face resistance around the 22,500-22,700 zone if the recovery continues. Amid this setup, we maintain a stock-specific approach, favoring banking, financials, and metals for long trades while remaining selective in other sectors,” Mishra said.

Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.