Edited excerpts from a chat with Anand James, Chief Market Strategist, Geojit Investments:
Nifty ended the week flat, but on Monday, the market would react to earnings of heavyweights like RIL, HDFC Bank and ICICI Bank. What are the key levels to watch out for?
Our eyes are on 26,020 as the near-term objective, encouraged by a parallel consolidation bias since 9th January, apparently putting a pause to the downside spree that has been on since the start of this year. However, the systematic uptick in VIX, albeit small, suggests that volatility expectations are rising, and hence it would be prudent to factor in wild swings. This would also mean that we will have to acknowledge a fair potential for falls to the 200-day SMA, now at 25,090, should we see slippage past 25,600.
Nifty Bank outperformed during the week, but PSU banks fared even better. Which side of the trade would you be on in the week ahead?
Between Nifty Bank and Nifty PSU Bank indices, the latter has the better momentum, having closed at a new record peak for the second consecutive day. This would also mean that should there be a broad market negativity, the PSU Bank Index could slip faster. That said, both indices are positioned for more upside, unless the quarterly result surprises weigh index biggies down.
FIIs are building short positions in Nifty futures. How worrisome is it for the January series?
At 2,13,900 contracts, FIIs are holding the highest index futures short positions since March 2025. Consequently, the long short ratio is at 9.3, not far from the record low. The reason why we have not hit a new record low for the ratio, despite the high short positions, is that index future longs saw a whopping 22.2% rise in positions on Friday. This has pushed FII’s index future longs to 21,814 contracts, almost the highest this month. More importantly, this build-up having come in a non-expiry day, there is a fair potential for continuation of the long buildup, and simultaneously force covering of the short positions.
Nifty Metal index ended the week 4.5% up. Do you see chances of profit booking in metal stocks after the rally?
While a morning star formation early this week, after testing super trend support gave a launchpad for the ongoing uptrend, we see Friday’s red candle formation as a bullish continuation pattern aiming for 12,000 initially. That said, the inability to float above 11,450 could signal a reversal.
Angel One was among the top gainers in the week with 18% upside. How to trade the stock on Monday?
The direct rise above 50 day SMA emboldens us to expect more upside on the stock, despite having come a long way from Jan lows. However, fast stochastics and 14-day RSI are about to signal overbought conditions. Further, we are just 4% away from November’s peak, from where a 20% decline had recently unfolded. These two pointers caution us to lock in some profits in the coming week’s upsides.
Give us your top ideas for the week.
GODREJPROP | LTP: 1,889 | TARGET: 1,970.00 | STOPLOSS: 1,819.6Despite a long wicked candle formation on Friday, pointing to rejection trades that put a stop to upside attempts, the three-day candle setup has formed a morning star formation. This suggests that the downtrend that has been on since the 8th of January is probably over, and an upmove is around the anvil. This encourages us to aim for 2038, but we will aim for 1970, the horizontal resistance, as the initial objective.