I-Sec’s Dharmesh Shah Projects Nifty at 25,800 by August Despite Recent Market Correction

Mumbai, July 12, 2025 — Despite intermittent volatility and a brief market correction, the structural integrity of the Nifty 50 index remains strong, says Dharmesh Shah, Head of Technical Research at ICICI Securities. Shah remains bullish on the Indian equity benchmark and expects it to scale new highs, projecting a target of 25,800 by August 2025.

Market Context: Healthy Correction or Structural Breakdown?

Over the past few sessions, Indian equities have witnessed moderate profit booking, with the Nifty 50 slipping briefly below the psychological 25,200 mark. Concerns ranging from global rate uncertainties, commodity fluctuations, and foreign fund outflows have kept investors cautious. However, analysts assert that this pullback is a normal part of a bull market and not a sign of structural weakness.

“The ongoing decline should be viewed as a healthy retracement rather than the beginning of a downtrend,” said Shah in a recent client note. “The index is undergoing time-wise consolidation within a well-defined rising channel.”

Technical Analysis: Trends, Support, and Projections

Shah noted that the Nifty has consistently respected key support levels and remains above the 50-day exponential moving average (EMA), a sign of underlying bullish momentum. According to his technical chartwork:

• Key Support Zone: 24,900 – 25,100

• Immediate Resistance: 25,500

• Target for August 2025: 25,800

"The structural higher-high and higher-low sequence remains intact, which is a classic hallmark of an uptrend," he explained. "Price action continues to favor dip-buying, with breadth indicators still in the bullish territory."

He also observed a steady uptick in the Relative Strength Index (RSI), which is currently trending above 60 — reinforcing bullish sentiment. Moreover, Bank Nifty and midcap indices have shown resilience, supporting broader market confidence.

Institutional Flows and Sectoral Strength

While Foreign Institutional Investors (FIIs) have turned cautious in recent sessions, Domestic Institutional Investors (DIIs) continue to provide strong support. The net inflows from mutual funds and insurance companies suggest robust retail and SIP-driven participation.

Sectors leading the charge include:

• Auto and Capital Goods: Showing breakout patterns on daily and weekly charts.

• FMCG and IT: Forming strong base setups after previous underperformance.

• Banks: Consolidating but likely to lead in the next up-leg, especially private sector names.

Shah believes “sector rotation” is key to the current rally’s longevity. "The market is not overly reliant on a single sector, which makes this uptrend more sustainable."

Investor Sentiment: From Fear to FOMO

Investor mood has shifted notably over the past three months — from cautious optimism to outright enthusiasm. Retail interest remains elevated, and many first-time investors are re-entering the market after the recent correction.

“There was some short-term fear-driven selling, but we’re already seeing a rebound. The Fear of Missing Out (FOMO) is evident, especially in small and midcap names," Shah added.

Global Cues: Eyes on US Inflation and Fed Signals

While the domestic setup remains robust, global macro triggers will continue to shape short-term movements. Market participants are closely watching U.S. inflation data and any forthcoming Federal Reserve commentary, especially after the last FOMC minutes hinted at a ‘data-dependent’ approach.

However, India’s macro resilience — highlighted by a stable rupee, healthy GDP growth, and a firm monsoon — keeps the long-term story intact.

Investor Outlook: Caution with Conviction

With the Nifty trading close to lifetime highs, investors are advised to be selective but not overly cautious.

“Stay with the trend but avoid chasing momentum blindly,” Shah advised. “Use dips as opportunities to accumulate quality stocks, especially in themes like manufacturing, infrastructure, and domestic consumption.”

He emphasized the importance of disciplined position sizing, adding, “Corrections are inevitable, but they are also the springboard for the next leg higher — provided you respect stop losses and invest based on structure, not emotion.”

Bullish Outlook Intact

In conclusion, Dharmesh Shah's outlook provides reassurance to investors rattled by short-term volatility. His chart-based analysis reinforces the narrative that India’s market is in a structural bull phase, with 25,800 on the Nifty a realistic short-term target.

Whether this projection materializes depends on both domestic earnings momentum and global headwinds. For now, the charts — and investor confidence — point upward.