In an exclusive interview, Kotak Securities’ Executive Vice President and Head of Equity Research, Mr. Shrikant Chouhan, said that Nifty 50 might bounce back till it’s all time high level in 2025 following the ABC Pattern.
The Indian stock market is at a crucial turning point, with Nifty 50 forming a significant technical pattern while an unusual market behavior is unfolding—the India VIX and Nifty 50 moving in lockstep. Traditionally, the India VIX (volatility index) and Nifty 50 have an inverse correlation, where rising volatility often signals a market correction. However, recent movements have seen both indices climbing together, leading to speculation about whether the market is on the verge of a major breakout or an unexpected reversal.
In this evolving scenario, technical indicators like the ABC pattern are offering valuable insights. To understand the market’s short-term and long-term trajectory, we spoke to Shrikant Chouhan, Executive VP and Head of Research at Kotak Securities, who shared his expert views on Nifty 50’s key levels, resistance zones, and why the overall sentiment remains bullish despite short-term corrections.
Understanding the ABC Pattern in Nifty 50
During the discussion, Mr. Shrikant Chouhan highlighted a well-known technical pattern that is currently forming on Nifty’s daily chart—the ABC pattern. “The ABC formation is quite evident, and traders should closely track its key levels,” he said.
This pattern consists of four critical points: A, B, C, and D. It starts with the formation of a new trend at Point A, followed by a correction at Point B. The market then retraces before resuming the trend at Point C, with another correction occurring at Point D.
The way this pattern plays out determines the market’s direction.
– An ascending ABCD pattern is bearish, indicating a potential downturn.
– A descending ABCD pattern is bullish, suggesting a rebound.
“The current setup suggests that traders need to keep a close eye on movements around these levels, as they could dictate the near-term trend for Nifty,” Chouhan added.
Read More: Market Mystery: Nifty 50 and India VIX Move in Lockstep – What’s Brewing?
Nifty’s Key Levels and Market Outlook
On Friday, Nifty closed at 22,124.7, which is very close to Point A, estimated around 21,850. According to Mr. Chouhan, Nifty’s future movement will depend on whether it approaches:
– 21,800 (Point A) – A crucial support level that could trigger a rally.
– 23,807 (Point B) – A resistance level that traders should closely monitor.
“If Nifty tests 21,800, we might see a short-term rally of 500-1,000 points, pushing it towards 23,807,” he noted. Despite possible fluctuations, the market’s broader structure remains bullish, and traders should consider a sell-on-rise strategy, as volatility within an uptrend is expected.
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Will Nifty 50 Touch 26,000 in 2025?
Over the next 6-8 months, Mr. Shrikant Chouhan anticipates that Nifty 50 could reach 26,000, setting a new all-time high. This projection aligns with prevailing market trends and technical indicators, reinforcing a bullish outlook. However, he cautions that any movement beyond 26,000 may be difficult due to both fundamental and technical constraints.
One of the primary challenges is overvalued stocks, as many companies are already trading at high price-to-earnings ratios, limiting further upside potential. Investors may hesitate to push valuations even higher, leading to consolidation or profit-booking at elevated levels. Additionally, technical resistance remains a key factor. Chart patterns such as the ABC pattern, Double Top, and Head & Shoulders suggest potential market reversals if Nifty approaches 26,000. These formations indicate that upward momentum might slow down or face significant pullbacks.
Given these factors, while the market remains positive in the medium term, traders should exercise caution. Mr. Chouhan advises that selling on major rises could be a prudent strategy, ensuring that investors capitalize on gains while managing downside risks effectively.
“Nifty 50 might bounce back till 26,000, however, traders should be mindful that the risk-reward ratio weakens beyond 26,000. It’s essential to maintain a balanced approach and not chase the rally blindly,” Chouhan advised.
Also Read: Big Shake-Up in Nifty 50! Zomato & Jio Finance In, BPCL & Britannia Out – What It Means for Investors?
Conclusion
The Indian stock market continues to evolve, with Nifty trading within the critical 21,800-23,807 range. If 21,800 holds, the market could see a 500-1,000 point rally, reinforcing the broader bullish trend with a 26,000 target in 2025. However, beyond 26,000, factors like high valuations and technical resistance could limit further gains. In such conditions, selling on major rises could be a strategic move for traders.
With insights from Mr. Shrikant Chouhan, market participants can navigate these trends more effectively, stay alert to key levels, and position themselves for potential opportunities in the coming months.
