Nifty remains 'buy on dip' for target of up to 25,800 as long as it holds 24,850, say experts

June 20, 2025 | Mumbai

India’s benchmark equity index, the Nifty 50, continues to remain firmly in a bullish grip as market experts suggest a 'buy-on-dips' strategy, with short- to medium-term targets as high as 25,800, provided the index sustains above 24,850. The resilience of the Indian market, backed by strong institutional flows and favorable macroeconomic indicators, is reinforcing investor sentiment even amid global uncertainties.

Technical Setup Favors Bullish Continuation

Analysts tracking the Nifty point out that the current uptrend remains intact. After consolidating around the psychological 25,000-mark earlier this week, the index has bounced back on renewed buying interest from domestic institutions and retail participants.

“The broader structure of Nifty remains bullish. As long as the index stays above the 24,850 level, it is a classic ‘buy-on-dips’ market. Any correction should be seen as an opportunity to accumulate quality large-cap and high beta stocks,” said Rohit Srivastava, Chief Strategist at Momentum Capital.

The 24,850 level is seen as a crucial support zone, being aligned with both the 20-day EMA and the recent breakout structure. Technical indicators such as the Relative Strength Index (RSI) are comfortably placed in bullish territory, indicating sustained momentum without overbought signals.

Sectoral Strength Driving Index Gains

The rally is being led by banking, auto, and capital goods stocks, with Nifty Bank and Nifty Auto outperforming the benchmark index. Robust earnings from frontline companies and higher credit growth projections for FY26 have contributed to this optimism.

“Banks are showing strong resilience and are expected to benefit from an interest rate environment that remains supportive. Auto stocks, too, are enjoying the demand push from rural and urban segments alike,” said Meena Shah, Head of Research at Valor Insights.

The IT sector, while under pressure from US macro concerns, is stabilizing and offering selective opportunities. Meanwhile, defensive sectors like FMCG and pharma are seeing rotational buying as investors hedge against global volatility.

Macro Tailwinds Supporting Sentiment

India's macroeconomic backdrop remains encouraging. Recent data from the Ministry of Statistics showed GDP growth of 7.2% for FY25, with manufacturing and construction being the leading contributors. Inflation remains within RBI’s comfort range, while foreign exchange reserves touched an all-time high of $665 billion last week.

Additionally, the RBI's neutral policy stance, with no aggressive rate hikes on the horizon, continues to support market liquidity.

“The macro landscape is well-balanced. We have robust GDP, moderating inflation, strong FPI inflows, and a stable rupee—all of which create a positive environment for equities,” noted Vikram Mehta, Economist at TradeAnalytics Research.

Global Risks Exist, But India Resilient

While Indian equities have shown remarkable strength, global uncertainties such as slower-than-expected rate cuts by the US Fed, geopolitical tensions, and rising crude oil prices remain risk factors.

However, the decoupling narrative for India is gaining traction.

“India is increasingly seen as a structural growth story, insulated from cyclical downturns in developed economies. Even if there’s a short-term global hiccup, India is likely to outperform,” said Anita Deshmukh, Global Market Strategist, Orium Securities.

Investor Outlook: Accumulate on Declines

With the Nifty eyeing levels closer to 25,800 in the short-to-medium term, market experts advise investors to remain cautious but optimistic. They suggest focusing on sector leaders, companies with earnings visibility, and momentum trades.

Short-term traders are advised to keep a stop-loss near 24,850, while positional investors may look at staggered buying strategies on any dips below 25,000.

The Nifty’s strong footing above 25,000 and the underlying market breadth suggest continued strength in the Indian equity market. With solid macroeconomic support, sectoral rotation, and investor confidence, the 'buy on dips' narrative remains intact. However, maintaining discipline with stop-losses and watching key global cues will be essential for navigating the next leg of the rally.