Trade Setup for February 5: Will Nifty move towards 24,050 and higher now?

Trade Setup for February 5: Will Nifty move towards 24,050 and higher now?
The US decision to pause tariffs triggered a strong recovery from lower levels in US futures overnight, setting a positive tone for Asian markets in the morning. In line with this, the Indian equity market saw a big move amid positive cues.

Company Value Change %Change

The Nifty 50 index opened with an upside gap of 150 points, and the market continued to move up further for the better part of the session. Intraday dips in between were bought into, and the market ended at a one-month high.

After showing a minor upside recovery from the lows on Monday, the Nifty witnessed an excellent upside breakout on Tuesday. Nifty reclaimed 23,700, and Sensex crossed the 78,500 level. Sensex gained 1,397 points to close at 78,584, while Nifty rose 378 points to 23,739.

The market recorded its best day since the first week of January. Sensex and Nifty turned positive for 2025, rising nearly 2% each.

Gains were broad-based, with more than 40 stocks closing higher. BSE-listed companies gained a market capitalisation of more than ₹5 lakh crore.

All major sectors contributed to the rally, with energy, banking, and metals leading the gains.

The market breadth was notably positive, with both mid and small-cap segments participating in the upward trajectory. The Nifty Midcap 100 index advanced by 1.56%, while the Smallcap 100 index recorded a gain of 1.09%.

Public sector enterprises showed particular strength, with the Nifty PSE index advancing 2.72% to close at 8,944.55. Complementing this performance, the PSU Bank and Infrastructure indices registered gains of 2.41% and 2.40%, respectively.

Meanwhile, foreign institutional investors (FIIs) turned net buyers on Tuesday for the first time after 23 successive sessions of net selling. On February 4, FIIs were net buyers at ₹809 crore—the first instance of net buying since January 2, when FIIs net bought shares worth ₹1,507 crore.

Meanwhile, domestic institutional investors (DIIs) continued their buying activity, purchasing shares worth ₹431 crore.


What do the Nifty 50 charts indicate?

LKP Securities’ Rupak De said the Nifty has moved up following a falling wedge pattern retest, indicating the possibility of a decent rally in the short term. Additionally, the index has been sustaining above the critical 21EMA on the daily timeframe. The RSI is in a bullish crossover and rising after forming a base on the daily timeframe, indicating strong momentum. In the short term, the index may move toward 24,050 and higher, while support levels are placed at 23,500 and 23,250.

According to Nagaraj Shetti of HDFC Securities, the swing low of Monday at 23,222 could now be considered as a new higher bottom of the bullish chart pattern and this also signal negation of previous bearish pattern like lower tops and bottoms. This is positive indication, he said.

Shetti added that the short term trend of Nifty is sharply up. Having moved above the immediate hurdle at 23,600 levels, the market could now zoom towards the upper 24,000 levels in the near term. Immediate support is placed at 23,550.

What do the Nifty Bank charts indicate?

The Nifty Bank ended the session at 50,157.95, surging 1.93% and reclaiming the psychologically important 50,000 level after a prolonged consolidation phase. On the daily chart, the index formed a robust bullish candle signalling renewed strength. Nifty Bank is now holding above its 20-day moving average (DMA).

“On the downside, immediate support is firmly placed at 48,500, while the resistance level stands at 50,820, aligning with the 50% Fibonacci retracement level,” said Om Mehra of SAMCO Securities.

Here are the stocks to watch ahead of Wednesday’s trading session:

– GST authorities drops ₹5.9 crore tax demand against Zomato.

Hero MotoCorp gets two GST penalty demand orders of ₹456 crore.

Sun Pharma gets tax GST penalty of ₹160 crore.

RVNL receives LoA for a project worth ₹404 crore from East Coast Railway.

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