Where do you see the markets heading into next week? Looking at the technical setup, we observed some resistance at 23,500 yesterday. However, in today’s rally, the market crossed 23,900. What is the next resistance level you are tracking? Additionally, what support level would you advise our viewers to keep an eye on? Do you agree with Mayuresh’s view that despite today’s rally, there are still certain factors that might continue to challenge the markets before we see a reversal and better days ahead?
Rajesh Palviya: After nearly seven weeks of weakness, this is the first week where we are closing in the green. Throughout today’s session, we witnessed substantial buying action. From a data perspective, we have managed to close above the 200-day moving average, which is a positive sign for this recovery.
However, on the higher side, we need to watch the significant call concentration around the 24,000-24,200 strike levels. It will be important to see if the market can close above these levels in the coming days. A close above 24,000 could trigger another round of short-covering, potentially extending the rally further. Based on today’s action, there is a clear indication that this rally could continue into the next week.
The broad recovery across most sectors and the short-covering in several large-cap stocks add to the confidence that this rally could extend to the 24,200-24,300 range. As long as Nifty holds above the 23,600 mark, positions bought during the recent decline should be held. The rally could extend to 24,000 and further to 24,300 in this upward move.In Bank Nifty, we have managed to close above the 51,000 level, signaling further potential for the rally. Bank Nifty could extend to the 51,600-51,700 zone. For holding positions in Bank Nifty or banking stocks, the stop loss should be placed at 50,800. If these levels hold in the coming week, the rally is likely to continue.
Among sectors, we see strong momentum in IT, pharma, and real estate. These sectors are showing significant buying traction and can support Nifty’s upward movement.
You’re predicting a 300-400 point up move in Nifty to 24,200-24,300 and further room for the rebound rally in Bank Nifty. You’ve mentioned pharma, but what about IT, which has been a clear outperformer? Do you think sectors that experienced the most drawdown, such as energy, will recover faster?
Rajesh Palviya: Energy is currently in an oversold trajectory, and some recovery is already visible. In today’s session, we noticed some buying activity in power and energy stocks at lower levels. If the Nifty continues to rise, short-covering in oversold sectors like FMCG, cement, and energy could add to the momentum.
However, for those looking to play the current momentum, IT, pharma, and real estate remain the sectors to watch. They are demonstrating strong momentum and are likely to outperform. Additionally, PSU banks have shown a good recovery from recent lows, making them attractive for near-term trading opportunities.
You’ve highlighted several sectors with potential for further rebounds and extended rallies. Could you provide specific trade recommendations for our viewers?
Rajesh Palviya: I have three trade recommendations at this juncture:
- Tech Mahindra (IT Sector): The stock has given a breakout on the daily and weekly charts, showing strong bullish momentum. It has a solid setup with long build-up in the data. The potential target for Tech Mahindra is ₹1,815, with a stop loss at ₹1,700.
- Godrej Properties (Real Estate Sector): This stock has been in an uptrend over the last 4-5 trading sessions, forming a strong base despite market weakness. It has rebounded sharply from recent lows and is now trading above the 20-day moving average. The target is ₹2,920, with a stop loss at ₹2,815.
- Titan (Consumer Sector): After a significant correction, Titan is forming a bottom on the near-term charts. The weekly chart shows a strong reversal. We expect Titan to extend its gains with a target of ₹3,440 and a stop loss at ₹3,265.