After a prolonged decline that took Nifty below 24,600, a recovery appears to be underway. From the mid-September peak of 25,450, the Nifty sell-off erased over 800 points, pushing short-term oscillators deep into oversold territory.
On Wednesday, a strong bullish candle emerged, signaling a potential pullback rally.
Here’s how analysts suggest playing the market right now:
Sahaj Agrawal, Senior Vice President: Head of Derivatives Research, Kotak Securities on Nifty
Sahaj Agrawal notes that Tuesday’s low at 24,587 now acts as a key swing low and critical technical support zone where buying interest has reappeared.
Supporting this bullish case, momentum indicators are rebounding from oversold levels, confirming Wednesday’s rally as a classic signal for an imminent market bounce.
The probable upside target is in the 25,000–25,100 range, corresponding to important Fibonacci retracement levels of 50% and 61.8%.
This combination of firm price support and improving momentum presents an attractive opportunity to initiate long positions near current levels or on dips toward 24,750.
The uptrend remains intact as long as 24,580 holds; a decisive break below this would threaten the bullish setup.
Considering the current context, Nifty’s position offers a favorable risk-reward entry for longs.
He suggested that implementing a Bull Call Spread can be a prudent, risk-defined strategy to capitalize on the anticipated upward move.
ETMarkets.com(Prices as of October 1)
Hardik Matalia, Derivative Analyst at Choice Broking on ICICI General Insurance
ICICI GI shares witnessed a mild retracement from their recent swing highs. After this corrective move, the stock has entered into a sideways consolidation phase near its demand zones, which has helped it absorb selling pressure while building a base for its next potential move.
On the daily chart, ICICIGI is forming a small Ascending Triangle pattern, a bullish continuation structure that typically signals the possibility of an upward breakout. Adding conviction to this setup, trading volumes have shown both consistency and a gradual rise, reflecting steady accumulation and stronger market participation at current levels.
A sustainable move above the Rs 1,920 mark would confirm the breakout of this pattern and could open the door for a renewed bullish outlook. If this breakout sustains, the stock could regain momentum and head towards higher levels, retesting its previous swing highs and potentially extending further if momentum strengthens.
From a momentum perspective, the Relative Strength Index (RSI) on the daily timeframe is placed at 53.96 and is curving upwards, suggesting improving strength with room for upside continuation.
Holding above Rs 1,900 would be an important confirmation of strength, while a decisive breakout above Rs 1,920 could trigger further upside momentum.
Overall, if ICICIGI manages to sustain above the Rs 1,920 mark, it could confirm a bullish breakout and set the stage for an upward move, with Rs 1,900 acting as a key support zone in the near term.
With this, Hardik Matalia stated that a Bull Call Ladder Spread will be an optimal strategy to capitalize on the bullish outlook.
ETMarkets.com(Prices as of October 1)
Below is the payoff graph of the strategy:
ETMarkets.com(Source: Choice Broking)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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