The domestic equity market experienced a strong intraday recovery, with the Nifty rebounding sharply and experts suggesting a 'buy on dips' structure. Key support is identified at 23,100–23,200, with potential upside towards 24,400 by June 2026. The metals and pharma sectors show continued strength, with JSW Steel and Caplin Point highlighted as top picks.

Next rally hinges on 23,800 breakout, says Dharmesh Shah on Nifty outlook

Synopsis

The domestic equity market experienced a strong intraday recovery, with the Nifty rebounding sharply and experts suggesting a 'buy on dips' structure. Key support is identified at 23,100–23,200, with potential upside towards 24,400 by June 2026. The metals and pharma sectors show continued strength, with JSW Steel and Caplin Point highlighted as top picks.

The domestic equity market witnessed a strong intraday recovery in today’s session, with the Nifty rebounding sharply from lower levels. Market experts believe the recent price action is increasingly pointing towards a “buy on dips” structure, supported by firm technical levels and relatively stable market breadth.

According to Dharmesh Shah from ICICI Direct, the index has consistently shown resilience around key support zones, particularly after recovering from the 23,350–23,400 levels.

He noted that the broader market structure over the past few sessions continues to indicate a buy-on-dips environment, with the 23,100–23,200 zone emerging as a strong support area. This range also coincides with a 61% retracement of the entire move from 22,200 to 24,800, making it a critical level for the index to sustain.

Shah further added that while 23,800 had acted as resistance, it is likely to be breached as it aligns closely with the 50-day moving average, which is currently acting as a technical hurdle. He emphasized that market breadth remains relatively stable, with the percentage of stocks trading above the 50-day moving average only marginally easing to around 68% from 72% last week, suggesting limited deterioration and the possibility of a sharper move ahead. On the upside, he expects Nifty to eventually cross 23,800 and move towards 24,400 by June 2026, while maintaining that the overall trend remains buy-on-dips with strong support at 23,100–23,200.

On stock-specific opportunities, Shah highlighted continued strength in the metals sector, which has been outperforming even during the recent corrective phase. He noted that better-than-expected earnings from metal companies have reinforced his positive stance on the space, with JSW Steel remaining his top pick.

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He pointed out that the stock has been forming a consistent higher top–higher bottom structure, typically seen in a rising channel, indicating underlying strength. He expects JSW Steel to move towards the 1,440–1,450 range, with a stop loss placed at 1,285. In the pharma space, he remains constructive on Caplin Point, which has also shown relative outperformance. According to him, the stock has delivered strong results and has broken out of a falling trendline on both daily and weekly charts, signaling the end of its corrective phase.

He expects Caplin Point to move towards 2,220, with a stop loss at 1,875. Overall, Shah’s view suggests that while the broader market remains range-bound with a positive bias, selective strength in metals and pharma could continue to drive alpha in the near term.

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Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today.

Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

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