Trade Setup 25 March: Nifty at 23,850 after relief rally; the broader market structure remains weak

Indian markets staged a sharp rebound on Tuesday, with the Nifty 50 recovering most of its previous session losses. However, analysts caution that the rally may be temporary, with high volatility expected amid global uncertainty, rising crude oil prices, and geopolitical tensions.

Indian equity benchmarks ended Tuesday’s session on a strong note, reclaiming much of the losses recorded earlier in the week. The Nifty 50 advanced nearly 1.8% to close above 22,900, while the BSE Sensex surged over 1,370 points to settle above the 74,000 mark.

Despite the rebound, market experts believe the current upmove is a relief rally rather than a confirmed trend reversal. Analysts expect the benchmark index to remain range-bound between 22,400 and 23,850 in the near term, with volatility likely to persist.

According to Bajaj Broking Research, the market continues to face headwinds from uncertain global cues, elevated crude oil prices, and ongoing geopolitical tensions. The brokerage noted that the index must sustain above the 23,862 level and form higher highs and higher lows to signal any meaningful pause in the ongoing downtrend.

Echoing a cautious outlook, Ponmudi R of Enrich Money highlighted that while momentum indicators are showing early signs of recovery from oversold levels, they still remain in a weaker zone. This suggests limited upside potential unless supported by stronger triggers.

Technical analysts also flagged key resistance and support levels. Vinay Rajani of HDFC Securities sees immediate resistance around 23,378, while support is placed near 22,600.

The banking index, Nifty Bank, also posted gains, closing at 52,605 after a 2.27% rise. However, technical indicators suggest indecision, with Sudeep Shah of SBI Securities noting that the index formed a small-bodied candle, indicating uncertainty after the recent pullback. He added that the 53,000–53,100 zone could act as a strong resistance level going forward.

Sectorally, the rally was broad-based, with all 15 sectoral indices ending in the green. The Nifty Auto Index led the gains with a 2.4% surge, while heavyweights like HDFC Bank, ICICI Bank, and Larsen & Toubro supported the benchmark indices.

Going ahead, analysts advise investors to remain cautious and adopt a sell-on-rise strategy, as the broader market structure remains weak despite the recent bounce.