Auto stocks show fatigue, while consumer names like Titan, Dixon, and Havells look stronger on the charts. With the GST Council meeting around the corner, Geojit’s Anand James shares why traders should stay cautious on autos but look for rebound opportunities in consumer stocks.
Edited excerpts from a chat:
August series saw the FII long-short ratio slip to 8.24%. Given that FIIs were unequivocally bearish, with selling in the cash market as well, what is the outlook for the September series?In March 2023, when index future longs dipped below 30%, the downward trend in the Nifty accelerated. However, a few days after the ratio hit 8.3%, the Nifty reversed as FIIs began covering their short positions. Notably, during the extreme bear phase from September 2024 to March 2025, the index future long proportion never fell to single digits. In contrast, the current phase has seen consecutive single-digit figures for 14 days.
Still, it is difficult to predict how soon a reversal will play out. It’s important to note that this extreme positioning stems from genuine concerns—not just a statistical anomaly requiring correction. The FIIs’ stance reflects a clearly negative outlook on Indian markets. A reversal is possible soon, but it may take time for the bearish view to fully play out—or for the FIIs to be proven wrong. At present, we are at an extreme position, with FII index future long positions still near 10%.
Besides resolution of the tariff issue, the market is also expecting GST implementation following the council’s meeting on September 3–4. Do you see excitement building up in consumer and auto stocks on the charts as well?After a strong two-week rally, the Nifty Auto index showed signs of fatigue, with profit-booking emerging in heavyweight stocks toward the end of the week. Technically, the index may decline toward the 38.2% Fibonacci retracement level at 24,785. A close below this could lead to further downside toward 24,525–24,460 (50% Fibo and 20DSMA), and possibly 24,270—the gap zone from August 14–18. The MACD approaching the signal line from above also hints at weakening momentum.
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On the derivatives front, nearly 77% of stocks have seen short additions in near-OTM strikes. Additionally, 40% of stocks saw short additions on Friday and 33% on a weekly basis, reinforcing bearish sentiment. Key constituents like M&M, Maruti, Tata Motors, Bajaj Auto, and Eicher Motors have formed reversal patterns, suggesting near-term profit booking. However, with the index historically posting gains in September 70% of the time over the past 10 years, a recovery in the latter half remains possible.Meanwhile, the Nifty Consumer Durables index had a volatile week but recovered in the last two sessions, closing above the 20DMA—a positive technical signal. Strength in index majors like Titan, Dixon, and Havells could support further upside. Derivative data shows 78% of stocks witnessed short additions in near-OTM PE strikes, indicating expectations of a reversal.Given these trends, a cautious approach is advised in auto stocks, while consumer durables may offer better opportunities for a rebound in the coming week.
Historically, September has seen a mixed trend. But given the positive outlook around GST and the festive season coming in, where do you see the market heading in the month ahead?Since 2020, two out of four Septembers have ended positive for the Nifty. Looking at the last 15 years, an interesting pattern emerges. In seven years where the combined July–August returns were under 2%, the following September turned positive five times—with an average return of 5.15%. This year, July–August has yielded a combined return of -4.37%, giving us a 71% historical probability of a positive September.
July and August proved bad for Nifty Bank. The banking gauge fell another 2% in the week. How would you plan your trades in the days ahead?The Bank Nifty index closed the week with a large bearish Marubozu candle, breaking below the 38.2% Fibonacci retracement level of 53,871 (measured from the March low to the June high), signaling weakening sentiment. Derivative data shows over 80% of stocks witnessed short buildup in near-ITM and OTM call strikes. Additionally, 75% of stocks saw short additions on Friday, and nearly 90% on a weekly basis—suggesting traders are positioned for further declines.
Technically, the 14-day RSI is approaching oversold territory, and several index heavyweights have formed candles resembling Doji patterns, indicating a potential attempt to stabilize. Stocks like HDFC Bank, ICICI Bank, SBI, Axis Bank, Bank of Baroda, and PNB may see a short-term bounce early next week.
Despite Bank Nifty’s 14-week RSI pointing to more downside, the 14-day RSI has already entered the oversold zone, which could trigger a brief recovery. However, caution is warranted later in the week, as the index may resume its decline toward 52,684 (20-week SMA) and 52,614 (50% Fibonacci level).
Angel One shares were among the top losers of the week. Do you see chances of a recovery ahead?Momentum is still with the bears, as indicated by directional moving indicators. However, six consecutive down-closes have pushed oscillators into oversold territory, prompting us to look for pullback plays. That said, strength will only be confirmed if the stock closes above Rs 2,286.
Give us your top ideas for the week ahead.CG Power (CMP: Rs 694)
View – Buy
Target – Rs 728
Stop-loss – Rs 684
The stock has been trading in a narrow, downward-sloping channel but recently broke above trendline resistance at Rs 685 on the daily chart, signaling a potential shift in momentum. The 14-day RSI is holding above 60 and has crossed above its average—adding to the bullish sentiment. We anticipate a move toward Rs 728 in the near term. Long positions should be protected with a stop-loss just below Rs 684.
Jai Corp (CMP: Rs 120)
View – Buy
Target – Rs 125 – Rs 129
Stop-loss – Rs 116.5
The stock saw profit-booking this week after a strong move last week and formed a Doji candle near the 61.8% Fibonacci retracement level at Rs 118, indicating indecision. However, the 14-day RSI remains above 55, suggesting potential for further upside. We expect a move toward Rs 125 and eventually Rs 129. Long positions should be protected with a stop-loss below Rs 116.5.
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