“Unless and until we do not breach 23,700 decisively, we feel that this is a buy on dip market and eventually Nifty should be heading towards the 24,800 mark, which is where the big resistance for the index is placed at,” Sharma told ET Now.
The 24,800 level is the line in the sand and the next major resistance the index must clear to confirm the broader recovery thesis. Getting there, Sharma argues, is a matter of when, not if, provided geopolitical conditions do not deteriorate sharply from here.
His conviction rests on how the market has behaved under pressure. After a seven-to-eight-session rally, some profit booking was inevitable. But the tell, for Sharma, was Monday’s gap-down open and what happened next. “Looking at the way we have handled Monday’s gap down and the way we have sort of seen buying happening in the dip, it seems like the current dip should also get bought into somewhere around the 24,100 mark,” he said.
Leadership Is Emerging and It Matters
What gives Sharma added confidence is the quality of the rally’s internals. Market breadth and sector rotation are throwing up constructive signals. “There is leadership emerging in the market. We are seeing public sector enterprises do very well. We are seeing metals stand out in this kind of market, and we are seeing support from the IT pack as well,” he said.
PSU enterprises, metals, and IT forming a three-pillar support structure is not a fragile setup. It suggests the market is not being carried by a single momentum trade, a distinction that matters when assessing whether dip-buying has institutional conviction behind it.
PSU Banks: The Next Leg
On Bank Nifty, Sharma’s read is nuanced. Banks led the first leg of the rally but have since taken a back seat. That, he argues, is about to change, specifically within the PSU banking segment.”PSU banks are looking pretty solid at these levels and we could see a round of buying emerge in the PSU banking pack over the next few trading sessions,” he said.
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His highest conviction name: Punjab National Bank. The risk-reward on PNB, Sharma says, is technically compelling. He sees the stock heading to Rs 120–124 on the upside, recommending purchase at current levels with a stop loss placed at Rs 111.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)