Higher lows indicate limited downside for Nifty: Rohit Srivastava

Despite rising geopolitical tensions and continued uncertainty around global rates, market participants may be reading too much into the apparent weakness of major indices, said Rohit Srivastava, founder of Strike Money Analytics & Indiacharts. While the Nifty has fallen below recent record highs and Bank Nifty has retreated above the 60,000 mark, Srivastava believes the underlying market structure tells a more nuanced story.Speaking to ET Now, Srivastava said that while the Nifty’s movement appears fragile at first glance, beneath the surface there is a slow but steady improvement. “It is unfortunate that we are seeing this kind of Nifty behavior from the bottom as we saw in early December. Whenever there is a two-three day rally, a major portion of the gains are given back in the next four to five days,” he noted. However, he highlighted a key positive trend: the formation of successive higher lows.

From early December through mid-to-late December, the index remained consistently above its previous lows, indicating that downward pressure is gradually easing. “The good news is that we have hit a higher bottom each time,” Srivastava said, adding that he expects a similar pattern to occur again. In the short term, he sees strong support around current levels, with the final support zone close to the 20-day moving average at around 26,037 on the Nifty.

On the upside, Srivastava pointed out the trendline connecting recent highs, which is around 26,540. “That will be the big breakout point where the upward movement is likely to accelerate,” he said. However, reaching that level may not be easy in the short term. According to him, the heavy sector rotation is preventing the indices from making a sharp, runaway move.

He explained that leadership within the market is constantly changing. A month ago, Reliance Industries seemed to be the star performer, but now that things have cooled down, the strength has shifted to other sectors such as metals and banking. While this churn limits momentum at the index level, it is also a sign of a healthier, broader market. “This is a market that is slowly building and we see that trend developing across the board, sector by sector,” Srivastava said.

When asked about the sectors he is bullish on, Srivastava highlighted banking as a clear standout. He pointed out that Bank Nifty has consolidated in the past few sessions and has fallen much less than the broader market. “It’s building a kind of base of almost 59,800,” he noted, adding that interest rate-sensitive sectors could continue to outperform.

Along with banking, Srivastava remains constructive on metals and autos, and also sees early signs of momentum returning to real estate stocks. He called DLF a recent recommendation to clients and described it as a stock that is just starting to join the broader movement. Within the banking industry, however, his preference is selective. Instead of chasing the heavyweights like HDFC Bank and Kotak Mahindra Bank, he sees stronger momentum building among second-tier private lenders. Stocks like RBL Bank, IDFC First Bank and IndusInd Bank, he said, are showing better relative strength compared to the bigger, broader names.

Overall, Srivastava’s assessment suggests that while the major indices may remain within a range in the near term, the market is quietly laying the foundation for a more sustainable uptrend, driven by rotation and selective sectoral strength rather than broad-based exuberance.