Nifty Outlook for June 25: Recovery rally puts 24,200 hurdle in focus

After suffering a sharp decline in the previous session, the Nifty staged a strong comeback on Wednesday, rising 197 points to close at 24,021.

The index opened 30 points lower but quickly reversed course, recovering more than 300 points from its intraday low. Gains were pared slightly in the final hour due to profit booking, though the benchmark still managed to end comfortably above the 24,000 mark.

Investor sentiment improved as crude oil prices eased and Asian markets remained stable, encouraging fresh buying across sectors. Strong gains in banking and financial stocks, along with a recovery in IT shares, helped drive the rally.

Within the Nifty 50 pack, IndiGo, Trent and Adani Enterprises emerged as the top gainers, while NTPC, Maruti Suzuki and Tata Steel ended among the major losers.

On the sectoral front, Realty, IT and Private Bank indices led the advance. Auto and Metal were the only sectors to close in negative territory.

The broader market also resumed its upward trajectory after a brief pause. The Nifty Midcap 100 and Nifty Smallcap 100 indices gained 0.10% and 0.39%, respectively.

Market participants will now track crude oil prices, the progress of the southwest monsoon, developments surrounding US-Iran negotiations and the outcome of the proposed India-US trade agreement for further cues.

Motilal Oswal's Siddhartha Khemka said continued progress on geopolitical and trade-related developments, along with stable energy prices and sustained foreign institutional inflows, could provide further support to domestic equities.

Technical analysts remain constructive on the market's near-term outlook after the benchmark successfully defended key support levels.

Nagaraj Shetti of HDFC Securities said the Nifty's rebound from the June 15 gap support indicates renewed strength and could pave the way for a move towards 24,150-24,200 initially, with the possibility of extending gains towards 24,500-24,600. He sees immediate support at 23,800.

Angel One's Osho Krishan said that although the index remains hesitant around the 24,100-24,150 zone, the sharp rebound from Tuesday's decline highlights strong buying interest at lower levels.

According to him, 23,900 remains a crucial support level, while 24,150 continues to be the key hurdle on the upside.

Nandish Shah of HDFC Securities said the Nifty respected its 50-day DEMA support and continues to attract buying interest within the gap zone created on June 15. He expects 24,190 to act as the immediate resistance, while support has shifted higher towards 23,800.

LKP Securities' Rupak De said the Nifty has reclaimed both its 20-EMA and 50-EMA on the hourly charts, improving the short-term technical setup. He believes sustained buying near the 20-EMA on the daily chart signals strong underlying demand, with resistance levels placed at 24,500 and 24,800, while 23,800 remains a critical support zone.