Nifty At All-Time High: What's Next? Analysts For 'Selective Buy-On-Dips' Approach

After a wait of 14 months and a roller-coaster ride of 287 sessions, the NSE Nifty finally hit its fresh all-time high of 26,295.55 on Thursday morning, breaking its previous life high of 26,277.15 recorded

on September 27, 2024. The record comes amid India’s strong economic growth, normal monsoons, 12-year low inflation, consumption boost by GST cuts, income tax rate cuts, and 100 bps interest rate cut.

Analysts said traders and investors should stay mindful of key resistance zones and manage risk proactively, as volatility may expand in the coming sessions. They also said given the prevailing volatility and global uncertainty, traders are advised to adopt a “selective buy-on-dips approach”, manage leverage prudently, and use tight trailing stop-losses with staggered profit-booking.

“The rally has fundamental support from potential earnings growth expected in Q3 and Q4 of FY 26. The consumption boom witnessed in October will translate into impressive earnings growth. If the trend sustains, even with slight moderation after the festival season, earnings growth, going forward, will be good, warranting a rally in the market,” V K Vijayakumar, chief investment strategist at Geojit Investments Limited.

Expectation of a rate cut by the Fed and a possible Russia-Ukraine peace accord have improved sentiments for equity markets globally, he added.

Ponmudi R, CEO of Enrich Money, said, “The Nifty 50 has marked a fresh all-time high at 26,295, clearly confirming that the broader trend remains bullish despite some profit booking at higher levels.”

What’s Next?

Vijayakumar said there is no room for a sharp sustaining uptrend since valuations do not support that.

Giving resistance and support levels, Amruta Shinde, technical & derivative analyst at Choice Equity Broking Pvt Ltd, said, “The Nifty 50 extended its recent gains, reinforcing the prevailing bullish undertone after a phase of consolidation. The index now finds strong immediate support in the 26,050-26,100 region, which has consistently acted as a demand zone. On the upside, resistance has gradually shifted toward the 26,300-26,350 band, where selling pressure is expected to emerge and potentially limit near-term upside.”

According to PL Capital’s latest equity outlook, the NSE Nifty could climb to 29,094 over the next 12 months, driven by resilient corporate earnings, expectations of policy support, and a revival in domestic demand. The brokerage values the index at its 15-year average P/E multiple of 19.2x, pegging the September 2027 EPS at 1,515.

JP Morgan and Macquarie also expect the Nifty might touch 30,000 by the end of 2026.

Sensex Crosses 86,000 For The First Time

Along with the Nifty, The BSE Sensex has also surged to its all-time high, crossing the 86,000 mark from the first time.

“The Sensex has closed to its all-time high zone around 85,850-85,950. A decisive breakout above this range could lead to a move toward 86,500 in the near term. Immediate support is placed at 85,000-85,300, which provides a strong base for further upside. Yesterday’s bullish engulfing candle confirmed a strong reversal after decisively reclaiming the 85,000 mark. RSI at 63 reflects rising buying momentum, MACD remains bullish, while CCI at +110 suggests strong momentum but also calls for some caution due to near-term overbought conditions,” Ponmudi R said.

What Should Traders Do?

Choice Equity Broking’s Shinde said that given the prevailing volatility and global uncertainty, traders are advised to adopt a “selective buy-on-dips approach”, manage leverage prudently, and use tight trailing stop-losses with staggered profit-booking. “Fresh long positions may be considered only on a sustained move above 26,300, supported by diligent monitoring of global cues and key technical levels.”

Enrich Money’s Ponmudi R also suggested a buy-on-dips strategy amid bullish sentiments in the market.

Ponmudi said, “Overall market sentiment remains firmly bullish, favouring a buy-on-dips strategy. Strong global cues, consistent domestic institutional inflows, and leadership from the banking space are reinforcing the positive undertone. That said, with indices hovering near record highs, traders and investors should stay mindful of key resistance zones and manage risk proactively, as volatility may expand in the coming sessions.”