Trade Setup March 6: Nifty rebounds above 24,700: Market experts caution

After three sessions of heavy selling, the Nifty staged a strong pullback rally, gaining 285 points to close above 24,700. While improved global cues supported the recovery, analysts warn the market remains vulnerable unless the index sustains above the 25,000–25,200 resistance zone.

India’s benchmark equity index, the Nifty 50, ended Thursday’s session with a strong rebound, recovering from recent losses to close above the 24,700 mark. The recovery came after three consecutive days of intense selling pressure, offering temporary relief to investors.

The index gained 285 points during the session, supported by improved global market cues and easing concerns over crude oil prices.

Strong Opening and Late-Day Rally

The Nifty opened 135 points higher and maintained a positive bias through the morning session, trading within a relatively narrow 140-point range until noon.

However, the momentum strengthened in the afternoon session. After 2:30 PM, the index witnessed a sharp rally of nearly 325 points from the mid-session low, climbing to an intraday high of 24,854 before closing firmly above the 24,700 level.

Sectoral Performance

Most sectoral indices ended the day in positive territory, indicating broad-based buying across the market.

Key highlights included:

Metals

Consumer durables

Auto stocks

These sectors led the gains during the pullback rally.

The only notable laggard was the IT sector, with the Nifty IT ending the day in the red.

Top Gainers and Losers

Among Nifty constituents, the top gainers included:

Adani Ports and Special Economic Zone

Hindalco Industries

Larsen & Toubro

Meanwhile, some stocks closed lower despite the market recovery:

Tech Mahindra

ICICI Bank

HCLTech

Broader Market Participation

The broader market mirrored the benchmark index’s recovery.

Nifty Midcap 100 rose 1.52%

Nifty Smallcap 100 gained 1.58%

The rally across midcap and smallcap segments suggested improved risk appetite among investors following the recent correction.

Key Technical Levels for Nifty

Despite the rebound, market experts caution that the current move may still be a temporary pullback rather than a full trend reversal.

According to Nagaraj Shetti of HDFC Securities, the recent market correction appears to be stabilizing, with technical charts showing a potential short-term bottom reversal pattern. If momentum continues, the Nifty could test the 25,000 level in the near term.

However, several analysts emphasized that the market remains vulnerable unless key resistance levels are decisively broken.

Key levels to watch:

Support Levels

24,600 – Immediate support (Centrum Finverse)

24,530 and 24,300 – Secondary supports (LKP Securities)

24,305 – Recent swing low

Resistance Levels

24,850 – Near-term resistance

25,000 – Psychological resistance

25,200 – Major resistance for trend confirmation

Cautious Outlook for Traders

Market experts continue to advise caution. Rupak De of LKP Securities said the “sell on rise” strategy remains valid as long as the Nifty trades below the 25,000 level.

Similarly, Nandish Shah of HDFC Securities pointed out that the Nifty is still trading below its 5-day, 10-day and 20-day DEMA (Double Exponential Moving Average), which could make a sustained bullish comeback difficult.

What Investors Should Watch

Going forward, traders will closely monitor:

Developments in the West Asia geopolitical conflict

Movements in global crude oil prices

Global risk sentiment and foreign institutional investor flows

These factors are expected to play a critical role in determining the next directional move for the Indian equity markets.