FII shorts in Nifty futures are a worrying trend. How has the data changed after the budget? Not the Budget, but the absence of a US-India trade deal kept the market in a sell-on-rise mode, with FIIs holding over 85% short positions in index futures. However, following the US announcement of lower rates, the picture started to change as FIIs started reducing their long-standing bearish bets on index futures. While they are still largely short positions, the trend is gradually shifting.
In the news-heavy week, Nifty ended around 1.5% higher. What do the charts indicate in terms of how sustainable this month’s rally can be and whether the momentum can take us to record highs again?
After a massive gap-up open and a decline from the day’s high due to profit booking on Tuesday, the index traded within a range. It has continued to consolidate over the past few sessions. At the bottom, support is at 25,500, while at the top there is resistance around 25,700. In the short term, the index is likely to remain between 25,500 and 25,700. A decisive breakout on either side of this range could trigger a targeted move.
IT stocks were in the spotlight for the wrong reasons. Is the dip here a buy or do you see more pain ahead?
The Nifty IT index broke investors and made a strong upside break following the announcement of rate cuts, only to fall back to crucial support after a new AI tool from Anthropic raised concerns about the profitability of IT services providers globally. Indian IT companies are largely service-oriented rather than product-driven, which has prompted bears to return to the space.
So far, the index has managed to stay above the crucial support level of 35,400 on a closing basis. However, a breakdown below this level could potentially lead to chaos in the sector. On the other hand, if the index remains above 35,400, we can expect a meaningful price recovery in the IT space.
HAL was one of the biggest losers of the week. Do you see any buying support coming in at lower levels?
I believe the stock could be poised for a recovery after a sharp sell-off. It has found initial support on the long-term rising trendline. If there is no new round of selling, we can expect a smart recovery in the shares.
The support is placed at 3,950 and long positions can be created at the current market price with a stop-loss below this level. On the higher side, the stock could move towards 4,350 in the near term.
Consumer discretionary has been on an upward trend, with Amber shares up 16% this week. How should you trade momentum?
A smart recovery is evident in the consumer discretionary sector, with many stocks witnessing a meaningful rebound after weeks of selling off. Amber begins to recover and has regained his 50 DMA. The strength will likely continue in the short term, at least until the stock falls back below 6,250. At the higher end, the current recovery could extend to 7,000-7,500.
Give us your best ideas for the week ahead.
Buy PERSISTENT | CMP: 5,852 | SL: 5,740 | TGT: 6,100
After a sharp and rapid correction, the stock has found support at the 200 DMA. If there is no new round of selling, we can expect a meaningful price recovery, which could push the stock towards 6,100 in the near term. Additionally, support from the previous swing high could further boost buying momentum at current levels.
WHIRLPOOL | buy CMP: 855 | SL: 835 | TGT: 920
The stock has witnessed a rounded bottom type recovery. There is a positive divergence visible on the daily RSI, indicating the potential for strong momentum in the near term. The price is facing short-term resistance at the 50 DMA; However, given the improved buying interest, a clawback of the 50 DMA seems very possible in the coming days.
Buy NAVINFLUOR | CMP: 6,417 | SL: 6,250 | TGT: 6,900
The stock has shown a consolidation breakout on the daily time frame, indicating renewed buying interest. As long as the price remains above the consolidation high, the trend is likely to remain positive with the potential to rise to 6,900 in the near term. At the bottom, support is placed at 6,250.
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