Nifty may resume uptrend soon; IT stocks could post gains in the near term: Rohit Srivastava

After a few volatile sessions, the market’s recent pullback is likely to be just a pause before the next leg higher, said Rohit Srivastava, founder of Strike Money Analytics & Indiacharts.

Srivastava believes that Nifty’s consolidation phase is coming to an end and most of the negative news that has weighed on sentiment has already been priced in.

“The base phase above 24,400-24,500 seems to be complete. The market has gained support there five or six times in the last few months. What we are seeing now is just a minor pullback after a strong rally of four to six days,” he told ET Now.

“I expect the uptrend to resume within a day or two,” he added.

Market consolidation is likely to be short-lived

According to Srivastava, the short correction is part of a healthy market rotation pattern.

“At this stage, sector rotation is a natural phenomenon – today’s winners can take a breather tomorrow, after which leadership shifts again,” he said. “But the overall trend remains upward,” he noted, pointing out that investors should view dips as opportunities and not as signs of weakness.

IT sector bounces back: but only in the short term?

Interestingly, the Nifty IT index, which was under pressure for months, has now emerged as a leader and emerged as the top sectoral gainer for two consecutive sessions.

Srivastava attributed the recovery to pre-earnings optimism and oversold valuations, rather than a structural turnaround.

“IT stocks were priced at their worst, but earnings are unlikely to be as bad as expected, which is why we are seeing this rebound,” he explains.
“However, investors must separate short-term opportunities from long-term potential,” he warned.

IT stocks: tactical play, not a long-term bet

Srivastava warned that despite brief performance bumps, IT stocks have underperformed the broader market over the past two decades.

“Since the 2000 tech bubble, IT has rarely outperformed the Nifty over the long term. The last time it had a meaningful lead was after the COVID-19 crisis, and we are still below that relative peak,” he said.

This means that IT may remain a tactical profession, performing better during defensive phases or uncertain economic periods, but not a strong outperformer in the long term.

Key Takeaways

• The market pullback is likely temporary; Nifty may resume uptrend soon.
• IT sector rally driven by earnings optimism and oversold conditions.
• Short-term upside in IT is possible, but long-term returns still lag the broader market.
• Sector rotation continues; investors should buy selectively on dips.