Nifty is likely to head higher amid a continued bullish trend. Key indicators are pointing towards potential upward movements in the coming week.

“The recent breakout from the ascending triangle pattern indicates a promising immediate target of 22,800 for the Nifty in the upcoming week,” says Santosh Meena, head of research at Swastika Investmart. However, Meena notes that the psychological barrier at 22,500 may present some resistance. On the flipside, a robust support zone between 22,125 and 22,222 offers considerable downside protection, providing stability to the index amid potential fluctuations.

The Bank Nifty has demonstrated strength but faces a critical resistance zone between 48,000 and 48,300. Overcoming this hurdle could propel the index towards a fresh all-time high, with potential targets projected at 48,800 and 49,300, as per Meena's analysis.

Examining the derivatives market, Meena underlines that Foreign Institutional Investors (FIIs) maintain a substantial short position (58 per cent) in index futures. This observation indicates the possibility of further short covering, potentially driving prices higher in the near term. Additionally, the Put call ratio of 1.27 remains within a comfortable range, contributing to bullish sentiments and market stability.

Despite the Nifty's continued record-breaking streak for the third consecutive week, concerns linger regarding the underperformance of mid-cap and small-cap indices. Regulatory apprehensions surrounding excessive enthusiasm in these segments, coupled with recent actions affecting certain non-banking financial companies (NBFCs) and city gas distributors, have somewhat dampened investor sentiment, he adds.

However, noteworthy market developments include surge in Tata Group stocks, particularly Tata Chemicals, which witnessed a remarkable 40 per cent increase amid speculations of a potential Tata Sons listing. Moreover, a notable shift in sentiment among Foreign Institutional Investors (FIIs), who turned net buyers, and sustained buying momentum from Domestic Institutional Investors (DIIs), further underscore market dynamics.

Market focus shifts to the release of inflation data, with both India and the US unveiling their respective Consumer Price Index (CPI) figures. Regulatory actions, along with government announcements, particularly pertaining to select sectors such as oil and gas, agriculture, and infrastructure, remain critical areas of investor attention.