Edited excerpts from a chat:
FII shorts in Nifty futures have been a worrying trend. How has the data changed after the Budget?
Not the budget, but the absence of a trade deal between the US and India kept the market in a “sell-on-rise” mode, with FIIs holding more than 85% short positions in index futures. However, following the US announcement of lower tariffs, the picture began to change as FIIs started reducing their long-standing bearish bets in index futures. Although they still largely hold short positions, the trend is gradually shifting.
The news heavy week saw Nifty ending around 1.5% higher. What are the charts indicating in terms of how sustainable the rally can be this month and whether the momentum can take us to record high once again?
Following a mammoth gap-up opening and a fall from the day’s high due to profit booking on Tuesday, the index has been trading within a range. It has been consolidating over the past few sessions. On the lower end, support is placed at 25,500, while on the higher end, resistance is seen around 25,700. In the short term, the index is likely to remain range-bound between 25,500 and 25,700. A decisive breakout on either side of this range could trigger a directional move.
IT stocks hogged the limelight for the wrong reasons. Is the dip here a buy or do you see more pain ahead?
The Nifty IT index bluffed investors, delivering a strong upside breakout on the back of the tariff-lowering announcement, only to fall back to crucial support after a new AI tool from Anthropic raised concerns about the profitability of IT service providers globally. Indian IT companies are largely services-oriented rather than product-driven, which prompted bears to return to the space.
As of now, the index has managed to hold above the crucial support level of 35,400 on a closing basis. However, a breakdown below this level could potentially create mayhem in the sector. On the other hand, if the index sustains above 35,400, we can expect a meaningful price recovery in the IT space.
HAL was one of the biggest losers in the week. Do you see some buying support coming in at lower levels?
I believe that after a sharp sell-off, the stock may be poised for a price recovery. It has found initial support at the long-term rising trendline. If another round of selling does not emerge, we can expect a smart recovery in the stock.
Support is placed at 3,950, and long positions can be created at the current market price with a stop-loss below this level. On the higher end, the stock may move towards 4,350 in the short term.
Consumer durables have been on an uptrend with Amber shares up 16% in the week. How should one trade the momentum?
A smart recovery is clearly visible in the consumer durables space, with many stocks witnessing a meaningful rebound after weeks of selling. Amber has started to recover, reclaiming its 50 DMA. The strength is likely to persist in the short term, at least until the stock falls back below 6,250. On the higher end, the current recovery could extend towards 7,000–7,500.
Give us your top ideas for the week ahead.
Buy PERSISTENT | CMP: 5,852 | SL: 5,740 | TGT: 6,100
After a sharp and swift correction, the stock has found support at the 200 DMA. If another round of selling does not emerge, we can expect a meaningful price recovery, potentially taking the stock towards 6,100 in the short term. Additionally, support from the previous swing high may further boost buying momentum at current levels.
Buy WHIRLPOOL | CMP: 855 | SL: 835 | TGT: 920
The stock has been witnessing a rounding-bottom type recovery. A positive divergence is visible on the daily RSI, indicating the potential for strong momentum in the short term. The price faces near-term resistance at the 50 DMA; however, given the improved buying interest, a reclaim of the 50 DMA appears highly possible over the next few days.
Buy NAVINFLUOR | CMP: 6,417 | SL: 6,250 | TGT: 6,900
The stock has delivered a consolidation breakout on the daily timeframe, suggesting renewed buying interest. As long as the price holds above the consolidation high, the trend is likely to remain positive with the potential to rise towards 6,900 in the short term. On the lower end, support is placed at 6,250.