MRPL, SAIL, Tata Steel in focus as Nifty signals bottom formation near 25,500: Nagaraj Shetti

Indian equity markets are showing early signs of stabilization after weeks of volatility, with the Nifty consolidating around key support levels, said Nagaraj Shetti, Technical & Derivative Analyst at HDFC Securities.Speaking to ET Now, Shetti said the index has been witnessing high volatility near the 25,500-25,600 zone, but consistent buying from lower levels indicates a potential bottom reversal in the making.

Helpful Outlook: Support Holds, Upside Levels in Focus

Shetti noted that the Nifty has repeatedly found support near 25,500, indicating strong buying interest. “The market has consolidated around these levels and the last two sessions confirm that 25,600 is acting as a solid base,” he said.

On the plus side, 26,000 remains the immediate hurdle. “Some consolidation near 26,000 is likely, but once that is breached, the index could move towards 26,200-26,300 in the near term,” Shetti added, while advising caution in view of the ongoing volatility.

Sector rotation in the game; Metals and oil refining shine

According to Shetti, the sector rotation is clearly visible, with renewed strength emerging in the shares of the metal and oil refineries after a correction phase.

He emphasized that MRPL is preferred in the field of oil refining. “After a prolonged decline, MRPL has staged a strong recovery and is showing a decisive upside breakout. At current levels around ₹152, investors can consider buying with a price target of ₹162 and a stop loss of ₹147,” he said.

On the metals segment, Shetti remains bullish on the Steel Authority of India. He pointed out that the stock has formed a bullish flag pattern after a consolidation phase. “SAIL looks technically strong. A buy near ₹152 could see upside towards ₹160, with a stop loss of ₹148,” he advised.

Tata Steel leads the metal rally

Turning to the broader metals basket, Shetti said momentum remains firmly positive. Stocks like Tata Steel and SAIL are leading the rally. “Tata Steel’s recent rise marks a clear breakout from its consolidation zone. From here, the stock could move towards ₹202-203 in the near term,” he said.

Insurance stocks: a wait-and-see approach

Commenting on ICICI Lombard General Insurance, Shetti said the stock is still in a downtrend and has no clear reversal signals yet. “The ₹1,800 level could act as a strong support. Investors should wait for base formation before taking fresh positions,” he warned.

Key takeaway

While broader sentiment remains cautious, technical indicators suggest the Nifty could form a base near current levels. Select opportunities exist in the metals and oil refining stocks, but Shetti advises investors to remain disciplined, focus on stock-specific setups and use strict stop-losses amid ongoing market volatility.