Kaynes’ shares are plummeting 43% from their October peak. Is a tactical rebound in store or is there more pain ahead?

Kaynes Technologies’ sharp 43% decline from its October peak, capped by a steep 12.5% ​​decline on Friday, has raised questions about whether the stock is approaching a reversal zone or sliding into deeper losses. While momentum indicators remain firmly bearish, the wide gap to the 200-day moving average signals potential mean-reversion opportunities for tactical investors.Edited excerpts from a conversation with Anand James, Chief Market Strategist, Geojit Investments Limited:

After a flat week, how would you trade the market now? Would Friday’s RBI optimism continue on Monday? Friday’s optimism stemmed from the completion of a morning star pattern, indicating a possible reversal of the downtrend that began on December 1. However, while the downturn was short-lived, the reversal is likely to be short-lived as well, as evidenced by Friday’s reading at 26,200, a key resistance to congestion.Although oscillators support a possible extension of the uptrend, we do not see enough momentum for a strong increase. We initially prefer a lower price towards 26.085–26.065. Alternatively, a break above 26,200 could trigger further gains towards 26,460-26,550, but a sharp vertical rise is less likely.

IT was among the biggest winners this week. Do you see opportunities for more upside potential?

Yes, the IT sector shows great potential for further upside. Nifty IT has been signaling a reversal since September and recently broke above the weekly supertrend, indicating strength. The weekly RSI near 60, along with the index closing above its 20-week high, reinforce the positive outlook. Based on these technical clues, the index could target 39,500 in the coming weeks.

Derivatives also support this bullish view. More than 50% of constituent stocks had short adds near OTM put strikes and long adds near call strikes. Additionally, 70% of stocks saw long builds on Friday, while 80% recorded weekly short coverings, suggesting traders are positioning themselves for further gains. Heavyweights like TCS, Infosys, HCL Tech, Wipro and Tech Mahindra are showing strong weekly charts and are expected to lead the rally towards 39,500.

PSU banks were under selling pressure but recovered on Friday. Will the chart indicate another new 52-week high in the future?

Although the index saw a pullback on Friday, the charts indicate a mixed outlook. The breakout of the wedge pattern in September and the resulting uptrend have been losing momentum since November. The recent breakdown below the rising trendline around 8,500 indicates a possible near-term trend shift, while the weekly MACD shows exhaustion candles, indicating early signs of consolidation. Nevertheless, the longer-term charts still reflect the underlying strength, keeping the possibility of a new 52-week high alive.

Derivatives data shows some recoveries on Friday, with long additions and short covering in stock futures, but weekly data indicates that more than half of positions were still short additions. Among individual stocks, SBI, Bank of Baroda, PNB, Union Bank, Canara Bank and Indian Bank could see a quick pullback early next week, although sustainability remains uncertain. The preferred strategy is to take advantage of any early rebounds next week while remaining cautious in the second half.

Kaynes ended the week down 21% amid negative reports. Do you see a chance for an upward leap or is it too risky to chase the falling knife?

Kaynes is now down 43.5% from its October peak, with Friday’s 12.5% ​​drop marking the steepest single-day drop during this period. Momentum indicators and oscillators point to a strong downtrend with no signs of bearish exhaustion, raising the risk that the decline could extend to at least the yearly low of Rs 3,825 in February. That said, the severity of Friday’s fall suggests that fear may have reached its peak.

Reinforcing this view, the only previous time the stock had stretched this far from its 200-day moving average was in April, when the gap was around 25%. Currently, the stock is nearly 26% off its 200-day SMA, prompting close scrutiny for possible mean-reversion moves in the coming week. Considering the contrarian nature of this view, the downside indicator is advised slightly below Rs 4,300, with Rs 4,541 as the initial recovery target.

Give us your best ideas for the week ahead.
COFORGE (CMP: 1977)
View: buy
Target: 2080-2180
SL: 1882
The stock has been in a steady uptrend since 2020 and is currently forming a Cup and Handle pattern on the charts. It is trying to break out of this formation, supported by a weekly RSI near 60 and a MACD above the signal line. Price action remains strong, trading well above the 20-, 50-, and 100-day moving averages, reinforcing the bullish outlook. The stock is expected to move towards Rs 2,080 and Rs 2,180 in the near term. Long positions should be protected with a stop-loss of less than Rs 1,882.

ABCAPITAL (CMP: 358)
View: buy
Goal: 368-377
SL: 348
The stock has maintained a strong uptrend since February 2025 and continues to show strength on both the daily and weekly charts. The weekly MACD remains above the signal line and the price is trading comfortably above the 20, 50 and 100 day moving averages, reinforcing the bullish outlook. The shares are expected to move towards Rs 368 and Rs 377 in the near term. All long positions should be protected with a stop-loss below Rs 348.