How long will the GST rate rejig-led rally continue? Here's what charts say

Technical charts suggest that the Nifty needs to overcome the hurdle at 25,120 levels for the short-term bias to turn favourable; detailed analysis below

Equity benchmark indices rallied over 1 per cent each as investors cheered as the Indian Prime Minister hinted at major structural changes in the Goods and Services Tax (GST) in the coming few months.  During his Independence Day speech on August 15, Friday, Prime Minister Modi said the government will announce next-generation GST reforms ahead of Diwali 2025 with an aim to reduce tax burden on the common man.  Post the extended-weekend owing to Independence Day (Friday), the benchmark indices BSE Sensex and the NSE Nifty surged over 1 per cent each to 81,766 and 25,022 in Monday's intra-day trading session.  ALSO READ | Modi's Diwali Dhamaka: 5 stocks to watch out for as govt plans GST reforms  Taking into consideration today's gain, the BSE Sensex has surged almost 2,000 points or 2.5 per cent from its low of 79,772 hit on August 11; and the NSE Nifty has jumped by 684 points or 2.8 per cent from its August 8 low of 24,338.  Can the GST rate rejig-led trigger help Sensex, Nifty extend the rally? Here's what the technical charts suggest. 

Technical Outlook on BSE Sensex and the NSE Nifty

NSE Nifty

Current Level: 24,900  Likely Target: 26,300 / 24,050  Upside Potential: 5.6%  Downside Risk: 3.4%  Support: 24,750; 24,580  Resistance: 25,120; 25,200; 25,550; 25,900  Amid today's rally, the NSE Nifty 50 index seems to be testing resistance around its 50-Day Moving Average (50-DMA), which stands at 25,020 levels. The daily chart, further, shows presence of a key resistance at 25,120 levels. The near-term bias is likely to remain subdued as long as the Nifty quotes this key level on a closing basis. 

 

    On the downside, the Nifty can slip back towards the 100-DMA support, which stands at 24,580 levels, with interim support visible around 24,750 levels. The downside target for the Nifty remains intact around the 200-DMA, which stands at 24,050 levels.  Having said that, select key momentum oscillators like the 14-day Relative Strength Index (RSI) and Moving Average Convergence-Divergence (MACD) have witnessed a positive crossover on the daily chart. Hence, the possibility of the Nifty breaking above the 25,120 hurdle cannot be ruled out.  In such a scenario, the Nifty would likely resume its upward rally towards 26,300 levels, with intermediate resistance anticipated around 25,200, 25,550 and 25,900 levels, suggests the technical charts.  ALSO READ | GST reforms: How and where to invest in the stock market? Analysts decode 

BSE Sensex

Current Level: 81,350  Likely Target: 83,600 / 78,765  Upside Potential: 2.8%  Downside Risk: 3.2%  Support: 81,200; 80,400; 79,900; 79,500; 79,100  Resistance: 82,000; 82,470; 82,865; 83,250  The BSE Sensex seems to be tantalizingly poised, with near support seen at 81,200 levels, and resistance at 82,000-mark.  Charts suggest break and consistent trade above 82,000-mark can trigger a rally towards 83,600 levels, with interim resistance likely around 82,470, 82,865 and 83,250 levels.  On the flip side, Sensex's inability to sustain above 81,200 levels can drag it back to 80,400 levels; below which an extended fall towards 78,765 levels cannot be ruled out. Interim support for the BSE benchmark index can be anticipated around 79,900, 79,500 and 79,100 levels.