F&O Talk: Nifty lacks direction on charts, says Sudeep Shah; outlines Bajaj Finance, Eternal strategy after Q1
The Indian stock market extended gains for a third consecutive session on Friday, with benchmark indices the Sensex and the Nifty ending higher amid overall
The Indian stock market extended gains for a third consecutive session on Friday, with benchmark indices the Sensex and the Nifty ending higher amid overall bullish global market sentiment.Sensex rose 166.5 points to close at 78,095, while the Nifty 50 gained over 66 points to end the session at 24,384. Broader markets also remained in the green, with the Nifty Midcap 100 and Nifty Smallcap 100 indices rising more than 0.4%.Analyst Sudeep Shah, Vice President and Head of Technical & Derivatives Research at SBI Securities, interacted with ETMarkets regarding the outlook for the Nifty and bank, as well as an index strategy for the upcoming week. The following are the edited excerpts from his chat:Nifty has rebounded almost 3% this week. What is your view on Nifty going forward?Over the past 15 weeks, the benchmark Nifty has remained range-bound, oscillating between 24,601 and 23,070. This trading range has narrowed further over the last seven weeks, with the index confined within a tighter band of 24,530-23,605, reflecting a lack of strong conviction from both bulls and bears. Despite this prolonged consolidation, recent price action hints that the balance may be shifting.Over the last six trading sessions, the index has staged a sharp recovery of more than 760 points, enabling it to end the month with gains of over 2% while closing near the upper end of its consolidation range. The rebound was primarily driven by heavyweights, with large-cap stocks leading the market higher. Notably, Nifty has formed candles with shadows on both sides for four consecutive months, underscoring the prevailing market indecision. So, what do the technical indicators suggest about the market’s next move?From a technical perspective, the index is currently trading above its 20, 50, and 100-day EMA levels, while hovering around its 200-day EMA. On the weekly chart, all major moving averages remain largely flat, indicating the absence of a sustained trend. Momentum indicators and oscillators on both the daily and weekly timeframes also continue to signal a sideways bias. With the setup approaching a critical juncture, the next few levels are likely to decide the market’s direction.Going forward, the 24,550-24,600 zone is expected to act as a crucial resistance area, as it coincides with previous swing highs. A decisive breakout above 24,600 could pave the way for a rally towards 24,900, with the potential to extend further to 25,200 in the near term. On the downside, the 24,150-24,100 zone is likely to provide strong support, and holding above this region will be crucial for maintaining the positive bias.IT index jumped a staggering 7% this week. How are charts looking and what’s the strategy for stocks in the sector?Nifty IT has staged a strong recovery, rallying nearly 18.5% from its July 1 low of 25,699.
The BriefWire