Extended excerpts from a chat about how to trade in the coming week:
Nifty finished the week of 0.5% lower when FII’s money continued to get from India in the midst of a modest profit season and delays when signing the India-US Trade Agreement. How would you play the decline of July -month in view of this background?
As we start the expiry week, the Rollover is 38.6%, in particular below the average of three months for comparable periods, which indicates a limited participation in performing further positions. Interesting is that the rollover costs are at its highest in three months, which suggests that although broader market involvement is modest, the premium paid by dedicated traders cautious optimism and hints reflects on potential volatility.
In the meantime, the open interest PUT-CALL RATIO (PCR) has fallen to 0.71, which indicates a shift in sentiment in which traders settle Bearish betting or increase bullish positions. In addition, 66% of the Nifty50 shares that will expire next week, witnessed short structure, and 86% of the August -series selectors have also seen comparable positioning. This heavy short exposure in both series could act as a contrary indicator, which may activate a bouncing back when the expiry date is approached.
Nifty has been hit in a narrow range since the last 2-3 months. Do you see the opportunities on an outbreak on both sides soon?
Friday saw an end of 50-dma, which exposed the 200-dma in the 24,000 environment as the next potential downward objective. However, with momentum indicators remain weak, however, we are not convinced that a directional disadvantage is about to arise. To this end, we are inclined to play for Upspwings, possibly in the second half of next week, and we will be prepared for a dive, only close under 24650.
Nifty Bank surpassed and ended with a small weekly win. How do you trade in the coming week? Will the momentum continue?
Nifty Bank is now near the Lower Bollinger Band. But with the band that has seen a narrowing lately, we believe that a higher swing is probably instead of a downward break of the lower tire. Directional moving indicators are also weak and signal against a vertical drop. To this end, we expect limited expansion to the disadvantages of Friday, followed by Upswing attempts in the coming week.
Weaker figures from Software Exportors have dropped the IT index by 4%. Are you afraid of more disadvantage in IT stocks?
Nifty, it was unable to keep the momentum after breaking last month above the weekly super trend level and has since formed lower lows. On the weekly graph, the index has formed a bearish marubozu candle candle, which is closed at 36,650 under the rising trendline, which indicates the growing weakness. Moreover, the weekly MacD is about to cross under the signal line, which further strengthens the Bearish front views for the upcoming sessions.
From the perspective of a derivatives, around 80% of IT shares witnessed short additions on Friday and 40% showed comparable activity during the week. Moreover, almost 50% of both the near ITM and OTM call attacks saw short structure, indicating that traders position for further downwards.
Under the index components, TCs, HCL Tech, Tech Mahindra and persistent have already seen their weekly MacD under the signal line. Infosys and Ltimindree are on the point of similar malfunctions, which indicates continuous pressure.
However, the average RSI of voters has fallen to around 35 and is approaching the sold -over territory. This indicates a potential attempt to reverse the trend in the near future, although confirmation is expected.
IEX shares had the worst trading day on Thursday when it finished almost 30% lower. Do you think that the recovery that is seen on Friday is strong enough to sustain in the coming days?
Although Thursday’s collapse was huge, it should not be forgotten that there is a ruthless disadvantage since July 16. Friday’s Inside Bar offers a spark of hope, because this candlestick pattern usually indicates a reversal. With disadvantage momentum indicators that still remain very strong, we are not convinced that the stock is ready for an outright reversal. An hour from close up 147 could be played for short cover rallies up to 155, but even in the case of a surprise extension in Upswing we are not convinced that a violation of 170-177 would quickly unfold.
Give me your top ideas for the week.
Bataindia (CMP: 1204)
View – Koop
Target – 1280
SL – 1167
The shares have been consolidating within a narrow range since March and is currently being traded near the lower limit of that range. On the daily graph, the MACD histogram draws drawing of exhaustion at lower levels, which indicates a potential short-term rebound. Given this setup, we expect a movement to the 1280 zone in the short term. To manage the risk, however, long positions must be protected with a stop loss placed below the level of 1167.
GIPCL (CMP: 199)
View – Koop
Target – 223
SL – 192
The share has had a falling trend in the last three weeks and is currently trying to stabilize near the rising trendline support around the 197 level. On the daily graph, the MACD histogram has last achieved its lower extreme levels in January 2025 what a potential for a short-term rebound. Based on this setup, we expect a movement to the 223 marking in the short term. Long positions must be protected with a stop-loss placed under 192 to manage the downward risk.
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