Updated 18 May 2025 at 13:45 IST
Stock Market Prediction Next Week: The Indian stock market made a strong comeback last week. Earlier, investors were worried due to rising tensions between India and Pakistan, which created uncertainty.
But over the weekend, the mood changed. Calmer geopolitical signals, positive economic news, and strong corporate updates helped improve investor confidence.
As a result, markets moved sharply higher. The Nifty 50 ended the week above the 25,000 mark, gaining over 4%. The rally was even stronger in the broader market.
Nifty Midcap 100 rose more than 7%, and Nifty Smallcap jumped over 9% — the biggest weekly gain since June 2020. This shows that investors are feeling more confident not only in large-cap companies but also in mid- and small-cap segments.
"The swift shift in sentiment has opened doors for renewed momentum and fresh opportunities. The market appears poised to build on this rally, supported by strong technical trends and improving risk appetite," said Sudeep Shah, Deputy Vice President and Head of Technical & Derivatives Research (Equity) at SBI Securities.
Many sectors contributed to this rally. Strong buying was seen in defence, railways, metal, and IT stocks. This broad-based participation highlights the deepening bullish sentiment across the market.
From a technical perspective, the structure of the Nifty charts indicates that bullish momentum is likely to extend into the coming week.
According to Sudeep Shah, “We expect the Nifty to move toward 25,300 in the short term, with the potential to stretch further toward 25,600. On the downside, the zone of 24,750–24,700 will likely provide a cushion in case of any immediate decline.”
The Sensex closed above 82,300, posting a weekly gain of 3.62%. A large bullish candle on the weekly chart suggests continued strength. The index is currently trading above both short- and long-term moving averages.
Also, the RSI (Relative Strength Index) crossed above 60 for the first time since September 2024, signalling strong momentum. The support zone lies between 81,600 and 81,700, with a potential upside toward 83,000 or higher.
Since April 23, Bank Nifty has been underperforming compared to Nifty. The ratio chart shows relative weakness, yet the overall trend remains positive. The index is still trading above key moving averages, and the RSI remains bullish.
A cup pattern is forming on the daily chart — typically a sign of a potential breakout. Resistance is around 55,700–55,800, and support lies in the 54,700–54,800 range.
The defence sector rallied over 17% last week. However, it’s now in an overbought zone as per RSI analysis. As a result, fresh entries in this sector may not offer favourable risk-to-reward at the current level.
The capital markets sector has shown a bullish breakout on the charts, backed by strong momentum indicators. This makes it a candidate for outperformance in the short term.
Railway stocks also showed a strong breakout with heavy volumes on Friday, suggesting further gains. Other sectors likely to remain strong in the near term include CPSC, PSU stocks, automobile, oil & gas, and real estate.
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Published 18 May 2025 at 11:11 IST