Edited excerpts from a chat:
Notwithstanding Wednesday’s loss, the market now looks to be on a steady uptrend path in October. Is it too early to start dreaming of 26,000?
Lofty expectations of 26000 are not over optimistic, given that the majority of Nifty 50 constituents have an RSI around 50, pointing to plenty of room for upsides. That said, we would like to start the week with limited expectations of 25460, and not much beyond for now, which also agrees with how option traders have positioned their calls for Tuesday’s weekly expiry. If dips thereof do not stretch much beyond 25120, we would be encouraged to stay positive, though a vertical rise is less anticipated.
Both Nifty Bank and Nifty IT outperformed Nifty in the week. Where do you see the opportunity going ahead?
The Nifty IT index has been showing signs of fatigue following the pullback that began in early October. A Long legged Doji candlestick has appeared on the daily chart near the 61.8% Fibonacci retracement level (from the September high to the October low), indicating potential weakness. This technical setup suggests a possible decline toward the 35,180–35,130 range, where buying interest may re-emerge. A recovery from this zone could lift the index toward 36,280, which coincides with the 20-week moving average (20WMA).
With TCS and Wipro scheduled to release their Q2 earnings later this week, these announcements could serve as key triggers for index movement. Several frontline IT stocks—TCS, Infosys, Tech Mahindra, LTIMindtree, Persistent Systems, and OFSS—have formed exhaustion candles on the daily chart, pointing to a potential short-term pullback. However, such dips may offer attractive entry points for investors looking to position for a rebound.
Meanwhile, a matured inverted Head & Shoulders pattern, formed since July, has confirmed Nifty Bank’s breakout earlier this week, accompanied by a breach of the 100-day moving average (100 DMA)—a sign of strengthening bullish momentum. The next resistance for the index lies around 56,900, and a close above this level could pave the way for a rally toward 57,650. Major players like HDFC Bank, ICICI Bank, SBI, Kotak Mahindra Bank, and Axis Bank are showing resilience, with their average RSI hovering around 60, indicating underlying strength. These stocks are well-positioned to lead the index in the near term. Looking ahead, the banking sector is expected to gain traction early next week, while the IT pack may attract fresh buying interest post a brief consolidation.
Given the sharp rally seen in Tata Communications shares on Friday amid hopes of being a beneficiary of TCS’ planned $6-7 billion investment in AI data centers, would you be a buyer in the stock in the week ahead or is it time to book profits?
We believe Friday’s gains have come way too quickly and steeply to warrant a fresh entry right away, with oscillators have rushed to the over-bought territory Dips to 1800 may present an opportunity to re enter, though. However, upswings will require a close above 1928 to signal sustainability.
BSE shares were among the top gainers during the week. Do you think the momentum will sustain?
BSE appears to have embarked on a sustainable uptrend, with improved prospects of breaching August’s challenge of 2530. However, being near the bollinger band, we would not be surprised to see a sideways or muted uptrend next week, before resuming the uptrend with vigour. Downside markers may be placed near 2247.
Give us your top ideas for the week:
Rajesh Exports (CMP: Rs 183)
View – Buy
Target – Rs 195
SL – Rs 178
The stock has been in a corrective phase since mid-September and has recently entered a phase of sideways consolidation, evident over the past week. The MACD histogram shows signs of exhaustion at lower levels, while a potential Supertrend breakout is developing on the hourly chart. Additionally, the appearance of a hammer candle on the weekly timeframe reinforces the possibility of a near-term upside.
Based on the current technical setup, we anticipate a move toward 195 in the short term. Long positions may be considered with a protective stop-loss below 178 to manage risk effectively.
Intellect Design (CMP: 1008)
View – Buy
Target – Rs 1040-1080
SL – Rs 995
The stock had been trading within a narrow range since the beginning of the month but witnessed a breakout on the upside on Friday, signaling a shift in momentum. This move was supported by several technical indicators: the RSI crossed above its 14D moving average, the stock closed above its 50-day moving average (50DMA), and the MACD histogram showed signs of exhaustion at lower levels—all pointing toward the potential for a stronger upside.
Given this setup, we anticipate the stock to move toward 1,040 and 1,080 in the near term. Long positions can be considered with a stop-loss placed below 995 to manage downside risk.
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