Edited excerpts from a chat with Anand James, Chief Market Strategist, Geojit Investments Limited:
The market is now seeing sustained buying after being in sell-on-rise mode. How would you trade Nifty in the week ahead and what would be your targets?
We had gone in last week with an objective of 24400. But with three days of close above the super trend, an extension to 24900 is on the cards. Volatility expectations would be key for this set up, but for now, the 7% decline in VIX on Friday, dragging it well below 19, points to let up in panic-relief driven seesawing moves that dominated the month so far. This augurs well for directional upsides. That said, with Q4 numbers flowing in, it would be stock specific moves that are likely to dominate, rather than broad based moves.
Nifty Bank outperformed while Nifty IT underperformed. Do you think the trend would continue and one can ride the momentum?
The relative outperformance of Nifty Bank over Nifty IT remains technically encouraging and is likely to sustain in the near term. On the charts, Bank Nifty has delivered a sharp rebound from a key support zone and reclaimed short-term moving averages, highlighting strong buying interest emerging from lower levels. Momentum indicators, while recovering from oversold territory, continue to suggest a move toward the prior supply zone, provided the index holds above the recent swing low of 50,060.Derivative positioning further reinforces the bullish outlook. Nearly 85% of near OTM put strikes have witnessed short buildup, indicating traders’ confidence in higher levels. In addition, around 75% of stock futures saw long additions or short covering on Friday, with close to 80% showing week-on-week short covering. Index heavyweights such as HDFC Bank, ICICI Bank, SBI, Kotak Bank, and Axis Bank have also formed bullish weekly reversal patterns, suggesting improved upside traction.
In contrast, Nifty IT continues to underperform, staying below key resistance levels with momentum indicators still subdued. Derivative data reflects a mildly bearish setup, with near OTM puts seeing long additions and near ITM calls witnessing short buildup. About 50% of IT stock futures have seen long unwinding, pointing to further consolidation or downside risk.
Overall, the momentum trade favors long positions in Bank Nifty, with initial resistance placed around 57,100-57,300, while maintaining a cautious-to-negative stance on Nifty IT until clearer reversal signals emerge.
Real estate stocks have been on fire with the realty index rallying 13% in the week. Which counters do you like and why?
Nifty Realty has witnessed a sharp rebound from the 680-700 support zone and reclaimed near-term resistance. Rising RSI and bullish MACD crossover indicate improving momentum, suggesting further upside toward 780-800, while dips may attract buying interest. Derivative cues also support a bullish near-term setup. On the stock-specific front, heavyweights such as DLF, Lodha, Godrej Properties, Oberoi Realty, Phoenix Mills, and Prestige have formed strong weekly reversal signals, including declining trendline breakouts and Morning Star patterns, indicating scope for further upside in the coming week. Expect these counters to lead the index towards 780-800 levels.
Angel One and Groww were among the top gainers as capital market stocks are also outperforming in this market recovery. What are the charts telling you?
While both have benefitted from broader market recovery, registering consecutive vertical rise through last week, they have also found rejection trades on approach to recent peaks. Groww on test of the highest level since listing, and Angel One on test of November peaks pulled back and closed with long wicks suggesting that traders are trying to cash in on recent gains.
Give us your top trading ideas for the week ahead
ADANIENSOL (CMP:1157)View: Buy
Target: 1300
SL: 1044
Adani Energy Solutions has witnessed a strong breakout above the 1100-1120 resistance zone, supported by rising volumes, indicating renewed buying interest. The stock has formed a higher high-higher low structure, confirming trend resumption. Momentum indicators remain supportive, with RSI trending upward and MACD sustaining a bullish crossover, suggesting strengthening positive momentum. Also, the stock has witnessed a weekly SuperTrend breakout confirming strength. As long as the price holds above the breakout zone, the broader bias remains positive. The stock has the potential to extend the upside towards 1300 in the near term. Any intermediate pullback is likely to attract buying interest. A breach below 1044 would negate the bullish setup and should be treated as a stoploss for positional traders.
BERGEPAINT (CMP:454)
View: Buy
Target: 475
SL: 439
Berger Paints is showing early signs of trend reversal across timeframes. On the daily chart, the stock has triggered a Supertrend breakout, indicating a shift toward short-term bullish momentum after a prolonged decline. Prices have also moved above recent consolidation zones, suggesting improving buying interest. On the weekly chart, momentum is turning favorable as the RSI has crossed above its moving average, a signal that downside pressure is easing and medium-term momentum is strengthening. This combination of daily trend breakout and weekly momentum improvement enhances the probability of further upward move.
The outlook remains positive, with an upside potential towards 475 in the near to medium term. A decisive break below 439 would negate the bullish setup and is placed as the stoploss.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)