NIFTY Index Chart Analysis

The NSE benchmark Nifty 50 index ended its three-week winning streak, falling by 1.39 per cent amid heightened geopolitical tensions between India and Pakistan. However, over the weekend, two major developments sparked a sharp turnaround. On Monday, the index rallied nearly 900 points in a single session—marking its strongest one-day gain since 2020—driven by a robust rebound in the Nifty IT index.[EasyDNNnews:PaidContentStart]

The surge was fuelled by news of a ceasefire between India and Pakistan, alongside reports of calm prevailing at the border. Adding to the positive sentiment, the United States announced a 90-day mutual tariff reduction arrangement with China, easing global trade concerns. Meanwhile, the India Meteorological Department (IMD) stated that the southwest monsoon is expected to arrive in Kerala by May 27, ahead of the usual onset date of June 1.

These tailwinds lifted the Nifty 50 to a fresh multi-month high, nearing the psychologically significant 25,000 level. However, Tuesday witnessed a pullback with no follow-through buying, and the index nearly re-tested the breakout level of its recent 14-day consolidation range between 23,900 and 24,590.

An interesting technical observation: since 2020, whenever the Nifty 50 has posted a single-day gain of more than 3 per cent—especially following a volatile phase—it has often led to a sustained upward trend. This behaviour was evident post-COVID, early in 2021 and again after the 2024 Lok Sabha election results. And now, once again, after weeks of volatility, we have seen sharp up-move of over 3 per cent.

On Monday, the index once again logged a strong 3 per cent move, breaking out of a 700-point consolidation. A measured move from the breakout level of 24,600 points towards a medium-term target of 25,300, provided the index holds above the gap zone created on 21 April 2025.

Looking ahead, the zone of 24,520– 24,600 is likely to serve as strong support. A breach below this zone may trigger a deeper correction towards the gap area formed on April 21, 2025, between 23,872 and 23,904—considered a crucial support level.

The 14-period Relative Strength Index (RSI) continues to hold above the 60 mark. Notably, despite the geopolitical developments, the RSI did not fall below 50. On the weekly chart, the RSI moved above 60 on an intra-week basis for the first time since October last year and is currently hovering around 59. A weekly close above 60 would signal further strength.

On the daily chart, the Average Directional Index (ADX) is gradually rising. The +DI line, indicating buying strength, stands above 33, while the –DI line, representing selling pressure, has declined to a one-month low. A similar setup is visible on the weekly chart, where the +DI is rising and –DI is falling—suggesting a favourable backdrop for bulls.

Following the sharp single-session gain, the Nifty 50 is expected to consolidate before any further upward move. Hence, market participants are advised to adopt a defensive stance—focusing on Large-Cap names, quality Mid-Caps, and stocks demonstrating improving relative strength. Leveraged positions should be avoided, and trades must be executed with strict stop-loss discipline.

STOCK RECOMMENDATIONS
CITY UNION BANK LTD. ........................... BUY .......................... CMP ₹190.80
BSE Code : 526299
Target 1 .... ₹218 
Target 2 ..... ₹230 
Stoploss....₹172 (CLS)

City Union Bank Ltd., the oldest private sector bank in India, was founded on 31 October 1904 and is headquartered in Kumbakonam, Tamil Nadu. The bank primarily focuses on lending to MSMEs and the retail/wholesale trade segment, with a granular asset profile. It also provides both short-term and long-term loans to the agricultural sector.

From a technical perspective, the stock has witnessed a breakout above the pivot point of a 23-week-long Stage 1 consolidation. This breakout is supported by strong volume—nearly double the 10-day average of 26.34 lakh shares per day—indicating broad market participation in the direction of the trend. The stock meets most of the CANSLIM characteristics. It has an EPS Rank of 80, a good score suggesting consistent earnings; an RS Rating of 82, also good, indicating outperformance relative to other stocks; Buyer Demand at 'A', as reflected in the recent interest in the stock; a Group Rank of 31, placing it in the strong Banks–Money Centre industry group; and a Master Score of 'B', close to the top rating.

On the daily chart, the MACD has shown a positive crossover, while the 14-period RSI has generated a buy signal by crossing above its 9-period average—validating the positive bias. Buy with a stop loss of ₹172 on a closing basis. The target range is ₹218– ₹230.

SCHAEFFLER INDIA LTD. ........................ BUY ..................... CMP ₹3,951.35
BSE Code : 505790
Target 1 ...... ₹4,300
Target 2 ..... ₹4,500 
Stoploss.....₹3,700 (CLS)

Schaeffler India is a preferred development partner to key nation-building industrial manufacturers, leading automobile companies, and renewable energy operators. It specialises in high-precision components and systems for drivetrain and chassis applications, as well as rolling and plain bearing solutions. Schaeffler is advancing future-ready applications in electric mobility, CO₂-efficient drives, automation, renewable energy, and Industry 4.0.

The stock corrected over 40 per cent from its all-time high registered in June last year. This correction halted near the 200-week SMA. The rebound from this level has been swift and supported by strong volume. As a result, the stock has broken out above the neckline of a double-bottom pattern on the weekly timeframe. The weekly RSI has entered bullish territory and registered a new swing high, which is a positive sign. Simultaneously, the MACD has moved above the zero line and remains above its signal line.

The stock meets most of the CANSLIM characteristics, with an EPS Rank of 83 (good, indicating consistent earnings), an RS Rating of 74 (fair, reflecting recent price performance), and Buyer Demand rated at 'A', highlighting strong interest in the stock. Buy with a stop loss of ₹3,700. The upside target range is ₹4,300 – ₹4,500.

*LEGEND:  ◼ EMA - Exponential Moving Average.  ◼ MACD - Moving Average Convergence Divergence  ◼ RMI - Relative Momentum Index  ◼  ROC - Rate of Change  ◼ RSI - Relative Strength Index
(Closing price as of May 13, 2025)

Disclaimer : Above recommendations are based on various technical parameters and any fundamental input has not been considered for the recommendations. Follow strict stop loss for the recommendation.

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