Edited excerpts from a chat:
Pakistan conflict has clearly taken a toll on the market rally with Nifty ending the week 1.4% down. Historical data indicates that conflicts with Pakistan lead to a market fall but it eventually bounces back. This time, the market has been reluctant to fall sharply as strikes have been measured. How do you read the market mood now and what are the levels to watch out for?
The Indian market has reacted differently during each major conflict with Pakistan. During the Uri attack and the subsequent surgical strikes, the Nifty initially fell by 11%, but later rallied by a little over 40%. In contrast, during the Pulwama attack and the retaliatory Balakot airstrike, the Nifty dropped just 2% before rallying 12%. However, those were single-day strikes targeting terrorist hideouts. This time, India appears determined and strategic in its approach to dismantle the root of terrorism — a mission that may take longer to complete. Hence, Operation Sindoor is not comparable to the previous two strikes.
Looking further back to the 1999 Kargil War, the Nifty rallied more than 50% during that period, as India demonstrated its ability to defend its sovereignty. Similarly, this time we expect downside to remain limited, with potential upsides unfolding over the short to medium term.
Technically, a bearish engulfing pattern has formed on the weekly chart, indicating a possible short-term correction. A decisive fall below 23,900 could trigger a decline, potentially dragging the index towards the 23,500–23,450 zone. On the other hand, a move above 24,250 may strengthen the market and improve sentiment.
Given the sharper fall in Nifty Bank in the week, do you see buy the dip opportunity in bank stocks? Will they first one to bounce back once the threats recedes?
Following the recent sharp rally, the Bank Nifty appears poised for a short-term correction. The index has slipped below the 21-day EMA and has also fallen back into its previous consolidation zone. Immediate support is seen at 53,450; a decisive break below this level could trigger further selling pressure. On the upside, a strong move above 54,000 may put the Bank Nifty back on track. Among banking stocks, major private sector players look attractive for buying once the correction is complete.
As expected, defence stocks were the most wanted ones on Dalal Street amid the conflict. What are the charts indicating at? Do you think the rally in the likes of IdeaForge is sustainable next week as well?
Defence stocks witnessed renewed interest on Friday after a few days of consolidation. They appear strong in the short term, as charts indicate that most of these stocks are trading above their short-term moving averages. IdeaForge, in particular, looks promising, with the price breaking out above its consolidation range.
Yes Bank shares ended the week xx% amid positive news flow around stake sale. What would be your trading strategy in the week ahead?
The stock witnessed a spectacular rally following stake sale news. However, it failed to break above the 200-day moving average (200 DMA) despite the rally. Resistance is seen at ₹20.50; a decisive move above this level could take the stock toward ₹22.30. On the downside, support is placed at ₹19.50 — a break below this level may cause the rally to lose momentum.
Give us your top ideas for the week.
Buy LATENTVIEW @ ₹412.50 | Target: ₹440 | Stop Loss: ₹397
The stock has witnessed renewed buying interest recently, pushing the price higher. This momentum is likely to sustain in the short term, as the price remains above the moving average, confirming the positive trend. Momentum indicators are in a bullish crossover and are rising on the daily timeframe. On the higher side, the stock may move toward ₹440.
Sell ICICI BANK @ ₹1388–1400 | Target: ₹1360 | Stop Loss: ₹1416
The stock has declined after forming a new high and consolidating around ₹1450. It has failed to attract fresh buying interest, leading to a breakdown below the 23.80% Fibonacci level — a sign of increasing bearishness. On the downside, the stock may fall toward ₹1360, while resistance is expected around ₹1416 on the upside.
Buy GSPL @ ₹321 | Target: ₹338 | Stop Loss: ₹313
The stock has formed a Piercing Line pattern on the daily chart, indicating a higher probability of recovery. It has also moved above the 21-day exponential moving average, signaling a short-term bullish trend. Overall sentiment is positive, with potential upside toward ₹338. Support is placed at ₹313.