The chart setup: Why the pullback was actually bullish
Nifty’s move from 22,200 to 24,600 was a 2,400-point rally. The subsequent 800-point correction to 23,800 represents exactly 33% retracement of that upward move — what technical analysts call a running correction. Rather than signalling weakness, this pattern typically indicates that the underlying trend is strong and buyers are simply regrouping before the next leg higher.
“This is exactly one-third correction — a healthy sign. Now the market is resuming its uptrend,” Rajani told ET Now, pointing to broad-based buying across the market as confirmation.
For traders holding long positions, Rajani pegs Friday’s low of 23,800 as the key support and stop loss level. On the upside, the immediate target is the 200-day EMA at 24,800. Even if intraday dips occur, he expects the overall market structure to remain firm, with stock-specific and sector-specific strength continuing to drive returns.
Sector in focus: Steel and metals
Beyond the index, Rajani is bullish on the steel and metals space. The rally in aluminium, copper, and zinc stocks has already played out. Steel stocks, he says, are now beginning to participate — and offer a strong opportunity for both positional investors and short-term traders looking to generate alpha.
Stock pick 1: Jindal Steel & Power
Rajani’s first pick is Jindal Steel & Power. Despite some softness on the day, he sees the dip as a buying opportunity. His recommended entry is in the ₹1,270–1,275 range, with a trading stop loss at ₹1,250. On the upside, he is targeting ₹1,350 — an upside of approximately 6% from the entry level.
Stock pick 2: NMDC
His second pick comes from the mining space. NMDC, trading around ₹90.50, has given a fresh breakout on medium and positional charts, making it an actionable buy at current levels. Rajani places the stop loss at ₹88.50 with an upside target of ₹94 — a clean risk-reward setup for traders looking for a short-term move in the metals theme.
The bottom line
Nifty’s technical structure points to continued upside toward 24,800, with 23,800 as the line in the sand for bulls. Within that backdrop, the steel and mining sectors offer specific trading opportunities, with Jindal Steel and NMDC emerging as the top picks from HDFC Securities’ technical desk.