Sensex, Nifty outlook for tomorrow: Stock market rally to continue on Thursday?

Sensex and Nifty kicked off April on a strong note. Analysts said there are signs of a recovery, as per technical charts, but a follow-up buying is required to confirm the trend. On Wednesday, the BSE Sensex settled the day at 73,134.32, up 1,186.77 points or 1.65 per cent. Nifty ended the day at 22,679.40, up 348 points or 1.56 per cent.

"After a disastrous March, the April series has begun on a positive note. While gains post the opening were limited, the strong recovery in the broader markets came as a relief for market participants. Technically, for Nifty, over the past few sessions, prices have been trading within a range of 22,400 – 23500, with multiple gap zones forming what is typically referred to as a “Common Gap” area, indicating a phase of consolidation following the recent sharp decline," said Angel One. 

The brokerage noted that global cues have turned supportive amid signs of easing tensions on the geopolitical front, and as long as there are no adverse developments, the positive momentum may sustain, especially considering the deeply oversold setup in momentum indicators.

Nifty outlook  Rupak De, Senior Technical Analyst at LKP Securities said the recent price action is showing signs of fatigue, which is typical after a sharp move, as markets often consolidate before deciding the next direction. A positive divergence on the daily RSI also indicates the possibility of short-term bullish momentum, he said.

"Although the broader trend still appears weak and tilted in favour of the bears, the index’s closeness to key support along with the RSI divergence points to early signs of a potential recovery. On the upside, resistance is placed at 22,800, above which the index could move towards 23,000 and higher. On the downside, a decisive fall below 22,200 may revive bearish momentum," he said.

Momentum indicators have improved marginally, with RSI recovering toward 37-40, but still sustaining below the bullish zone, indicating the rebound is corrective in nature. A sustained move above 22,950–23,000 is required to extend the recovery toward 23,200–23,400, while failure to hold 22,500 could again drag the index toward 22,250–22,000, said Dhupesh Dhameja of SAMCO Securities.

He said the index has managed to hold the 22,500–22,450 support zone and moved toward 22,800–22,950, where supply emerged again. The index continued to trade below its falling short-term moving averages, suggesting that the primary trend remains under pressure, he said.

From the derivatives perspective, Dhameja said Put Call ratio (PCR) near 0.81 indicates cautious positioning. The option chain shows call writers are active around 22,900–23,000, while the Put writers are positioned near 22,500, making this an important support zone. A move above 23,000 may trigger short covering toward 23,300, whereas a break below 22,500 could resume the broader downtrend.

Sensex outlook Hitesh Tailor, Technical Research Analyst at Choice Equity Broking  said Sensex has shown a sharp pullback from lower levels, suggesting emergence of demand near key support zones. He said the broader trend still requires confirmation through sustained upside follow-through. 

"Key technical levels indicate that support is placed in the 72,400–72,500 zone, which may act as a crucial demand area, while resistance is seen around 73,900–74,000, where any further upside could face supply and profit-booking pressure," he said.