Edited excerpts from a chat:
Nifty ended the week lower as IT stocks dragged the index. How do you see the risk-reward changing for the week ahead?
What started as a slow turn lower from the top turned into a massive downside gapped dive on Friday, ideally projecting a long drawn downside aiming 23800 initially. But this view is not so straight forward. Our first surmise is that the inability to sustain the 3rd February’s steep upside gapped opening was a sign of loss in momentum, which was confirmed by a return to 25450 region, which filled the break away gap. While this completely neutralises the upside wave triggered on 3rd February, the vicinity of the 20 day SMA and a horizontal support could give the bulls some room for regrouping. RSI has slipped to 40 vicinity, and stochastics have also eased, which may prompt a sideways move before the next large move unfolds.Nifty IT index ended the week 8% lower as investors remain worried about the impact of AI. Do you see some shorting opportunities here?
The Nifty IT Index has broken down decisively from its recent consolidation range, slipping below its long standing rising trendline and triggering strong bearish momentum. The index is now attempting to stabilize near the 32,500-32,800 zone, a previously established demand area. If this support fails to hold, the next significant downside levels lie at 31,100-31,000, where earlier buying activity had emerged.
Momentum indicators remain notably weak. The RSI continues to hover in deeply oversold territory, and the MACD reflects strong negative momentum. While this setup increases the probability of a short‑term technical rebound, any recovery is likely to remain shallow unless supported by renewed buying interest.
From a stock‑specific angle, index heavyweights such as TCS, Infosys, HCLTech, Tech Mahindra, and LTIM have formed strong reversal candles on Friday, supported by above average volumes indicating the start of a pullback attempt. Immediate resistance is placed at 34,000-34,300, an area marked by repeated intraday rejections. A sustained breakout above this band may open the path toward 35,200-35,500. However, the broader trend remains under pressure as long as the index trades below the 200‑day SMA, currently near 36,800.
Historically too, February has delivered only 44% positive outcomes, with four of the last five Februarys ending in the red. With 2026 already showing significant declines, continued volatility and a defensive undertone appear likely. Rallies may struggle to sustain, favouring a sell‑on‑rise approach until overall market breadth shows improvement.
Defence stocks are doing well. How would you trade and do you see more upside?
The Nifty Defence Index continues to move within a broad consolidation range, mirroring the pause visible on the weekly chart after its strong multi-year uptrend. On the daily timeframe, the index is hovering near 8,000-8,050, a region that has consistently acted as a supply zone. A decisive breakout above 8,150 would be required to trigger a short term move toward 8,350-8,450, aligning with the upper boundary of the weekly consolidation pattern.
Momentum indicators show mild improvement: the RSI is stabilizing around the mid-50s, and the MACD on both daily and weekly charts is attempting a positive crossover, hinting at early signs of renewed momentum. Support remains strong at 7,750-7,800, while a deeper support band lies at 7,500-7,450, which aligns with the broader weekly structure and is crucial for sustaining medium‑term strength.
From a stock‑specific standpoint, heavyweights such as HAL, BEL, and Solar Industries together accounting for roughly 68% of the index appear to be attempting a pullback. However, many of the remaining constituents have yet to exhibit clear signs of reversal. Derivatives data also reflects short build‑up across nearly 67% of the near OTM call strikes, adding to the current range bound setup.
Overall, the outlook remains sideways with a slight positive bias, as long as the index holds above the 7,750 support zone.
SBI was among the top weekly gainers. Do you think more upside is left?
Four consecutive days of close above upper bollinger band point towards the strong upmove that is in motion. Overbought RSI and stochastics confirm the same. But apart from a slight exhaustion suggested by stochastic momentum indicator, there is little to suggest that the uptrend is over. Directional moving indicators continue to be strong, and candle stick patterns of last week fail to indicate a reversal as yet.
Give me your top trading ideas for the week.
HCLTECH (CMP:1455)
View: Buy
Target: 1500 – 1550
SL: 1400
HCL Tech is showing early signs of a recovery after a sharp decline, with buyers stepping in near the 1400-1,420 support zone. Candlestick formation on Friday points to a Morning Star candle, a strong reversal pattern, in the making which requires one more bullish candle to complete the pattern. The RSI has begun turning up from oversold levels, and the MACD is attempting a bullish crossover, improving the prospects for a continued rebound. A move above 1,485-1,500 could strengthen upward momentum toward 1,550. As long as the stock holds above 1,400, the short‑term bias remains upward.
COFORGE (CMP:1362)
View: Buy
Target: 1420 – 1500
SL: 1315
Coforge is attempting to stabilize after a sharp decline, with buyers emerging near the 1,320–1,350 support zone. The RSI has begun to turn up from deeply oversold levels, indicating improving momentum, while the MACD is showing early signs of flattening, hinting at a potential bullish crossover. The formation of a base near current levels suggests downside exhaustion, increasing the probability of a short‑term rebound. A move above 1,420 could trigger a stronger recovery toward 1,500-1,520. As long as the stock holds above 1,315, the near‑term bias remains tilted upward.