Nifty 50 Set for a Breakout on Monday? Indo-Pak Ceasefire Truce, Short Covering May Spark Rally

 


Nifty 50 may witness a strong breakout on Monday following Indo-Pak ceasefire news and heavy short covering in index constituents. Check out the top 10 stocks fueling this move with technical and fundamental insights.

How Indo-Pak Ceasefire and Short Covering Could Trigger a Nifty 50 Rally on Monday

The Indian stock markets, especially the Nifty 50, are poised for a significant move on Monday. With the surprise announcement of a renewed ceasefire agreement between India and Pakistan, geopolitical tensions have eased considerably, boosting investor sentiment ahead of the weekend. Add to this a visible build-up of short positions during the last expiry, and we may be looking at a classic short-covering rally, potentially triggering a technical breakout in the Nifty 50.

What’s Driving the Sentiment?

  1. Geopolitical De-escalation:
    Markets dislike uncertainty. A stable border situation between India and Pakistan reduces perceived risk, encouraging foreign institutional inflows and retail confidence.

  2. Short Covering Pressure:
    F&O data shows heavy short build-up in Nifty and its major constituents during the last few sessions. With positive news over the weekend, short-sellers may scramble to cover positions early Monday, potentially pushing the index higher.

  3. Global Cues Aligning:
    US markets closed strong on Friday, and crude oil prices softened, which are also positive tailwinds for Indian equities.

Nifty 50 Technical Overview

  • Current Level (as of Friday close): 22,230

  • Key Resistance: 22,400 (Previous swing high)

  • Key Support: 21,900 (20-day EMA)

  • MACD: Turning positive, signaling bullish crossover

  • RSI: At 56 – indicates room for further upside

  • Chart Pattern: Forming a bullish flag – possible breakout on gap-up

Top 10 Nifty Stocks Likely to Fuel the Breakout

Here are 10 heavyweight Nifty 50 stocks with strong fundamentals and bullish technical setups that could lead the index rally:

1. Reliance Industries (RIL)

  • Fundamentals: Diversified business, strong petrochem margins, Jio expansion

  • Technical: Holding above 200-DMA, RSI near breakout zone

  • Target: ₹2,900

  • Support: ₹2,730

2. HDFC Bank

  • Fundamentals: Stable asset quality, Q4 improvement in net interest margin

  • Technical: Formed double bottom, MACD bullish

  • Target: ₹1,550

  • Support: ₹1,490

3. ICICI Bank

  • Fundamentals: Strong loan growth, better CASA ratio

  • Technical: Ascending triangle breakout likely

  • Target: ₹1,150

  • Support: ₹1,080

4. Infosys

  • Fundamentals: Stable Q4 results, high attrition control, AI-led projects

  • Technical: Reversal from 100-DMA, RSI moving up

  • Target: ₹1,520

  • Support: ₹1,440

5. TCS

  • Fundamentals: Strong order book, expanding in BFSI and healthcare verticals

  • Technical: Bullish divergence forming

  • Target: ₹4,000

  • Support: ₹3,840

6. Larsen & Toubro (L&T)

  • Fundamentals: Infrastructure boom, strong order inflows

  • Technical: Channel breakout possible

  • Target: ₹3,800

  • Support: ₹3,620

7. Axis Bank

  • Fundamentals: Improving retail lending and net interest margin

  • Technical: Near resistance at ₹1,150; breakout may push further

  • Target: ₹1,200

  • Support: ₹1,100

8. HUL (Hindustan Unilever)

  • Fundamentals: Volume growth returning, price cuts in rural markets helping

  • Technical: RSI crossover, MACD turning positive

  • Target: ₹2,600

  • Support: ₹2,480

9. Maruti Suzuki

  • Fundamentals: New model pipeline, EV strategy in motion

  • Technical: Reversal from trendline support

  • Target: ₹13,200

  • Support: ₹12,400

10. Bharti Airtel

  • Fundamentals: Strong ARPU growth, 5G expansion

  • Technical: Narrow range breakout possible

  • Target: ₹1,400

  • Support: ₹1,340

Conclusion: Nifty 50’s Breakout Opportunity

With easing geopolitical tensions, global support, and aggressive short positions that may unwind quickly, Nifty 50 could see a sharp rally on Monday, especially if it crosses the 22,400 mark with volume support. The top 10 index stocks mentioned above will likely lead the charge, supported by institutional buying and FII return amid improved macro cues.

Keep an eye on early price action Monday – if there's a gap-up with strong volumes, we could be entering a fresh uptrend.

Disclaimer: This is not investment advice. All stock market investments involve risk. Please consult a licensed financial advisor before making any investment decisions.


Welcome to The Financial and Tech Literacy! I’m Awdhesh Kumar, a finance and tech enthusiast with 20+ years of experience in accounts, taxation, and the stock market. This blog simplifies finance and digital topics for all—students, professionals, retirees, and new investors. Learn about stock market strategies, personal finance, mutual funds, tech tools, digital banking, and government schemes. All content is original, practical, and based on real experience—no paid promotions or clickbait. We refer to trusted sources like SEBI, RBI, NSE, and Economic Times. Stay updated, make informed decisions, and grow financially with us. For contact: awdheshdube65@gmail.com.

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