Rohit Srivastava, Founder, Strike Money Analytics & Indiacharts highlighted the key resistance levels and potential downside. “I will say the key resistance that we are watching is 25,770, close to that. It is also from where the market had gapped down. We had gapped down below 25,750 just a few days ago, so that becomes an important resistance that we have to get past if the market really has to continue higher from here. Otherwise, with this level in mind we would probably think that if the market stays weak today, we may see it resuming its downward journey, head back towards 25,300 or 25,000 in the coming days. So, the risk-reward is favourable more to the downside, which means more towards shorts than longs, and that is how we are approaching this market.”
Looking ahead to the next quarter, Srivastava advised investors to focus on value or momentum rather than broad sector bets. “The only thing that you can do here is search for value or look for momentum. There is no trade other than that, which means that if there are pockets of growth, then maybe you can find one stock out of 100, which means the odds are broadly against you if you randomly pick stocks. So, it makes it pretty difficult to say that okay, this particular sector will do well.”
He noted that even within banking and financials, performance has been uneven. “Even within banking and financials you have only seen SBI do well, for example, and even within PSU banks now SBI is the only one making new highs. You are not seeing that in Canara, PNB, and other PSU banks. So, it is not really very broad-based as it was earlier. This narrowness makes it very difficult to take a sector call.”
For those looking for value, Srivastava suggested exploring underappreciated segments. “Value is probably in very outside areas. For example, we look at a sector like sugar stocks, very less looked at. They are at or below book value, so that makes it a high-value sector, but it is also a non-performing area. But being a non-performer and at value makes more sense from a point of view that okay, you are protected by value at least on the downside versus buying something that is expensive and degrowing.”
He added that earnings growth for the Nifty 50 is modest, keeping risk to the downside. “Earnings growth is at 7.5% for the Nifty 50, which is pretty low. You are not even in double digits, whereas the PE ratio for the Nifty 50 is still at around 21 times. So that makes it relatively expensive compared to earnings. Either we can take a call that earnings growth is going to pick up substantially, which is not clear, and therefore that keeps risk to the downside as far as Nifty is concerned.”
Regarding sectoral flows, Srivastava noted, “Out of the big sectors, financials is the only place where money has gone during 2025. But what I said is that it is beginning to show some kind of narrowness, which is why you are not able to take a clear-cut call that you should continue to chase that area. But yes, there is strength in pockets of financials, especially NBFCs. PSU banks I would be a little careful because the run-up has become pretty strong, especially in stocks like SBI, where the RSI indicator is already at 80—not just on the daily, weekly, and monthly chart. So it is pretty much at the fag end of this move, I would think, and so I would actually have to look elsewhere. Like I said, NBFCs are probably the only place right now in the near term where probably there is still some upside left.”