“We are now entering the expiry week of this series, and considering the cut seen this past week, the broader market has also been under supply pressure. All these factors point to further weakness in the coming week—especially if we stay below the 25,000 mark for the next couple of days,” says Rajesh Palviya, Axis Securities.
Do you think we are closer to important support levels? In fact, what are the new support levels now, according to you? Looking at Friday’s close and the entire week, what’s going to be on your radar as far as Nifty and Bank Nifty are concerned?
Rajesh Palviya: Looking at the breakdown we’ve witnessed on the Nifty, it is now trading below 24,900, which was a major support area during this correction. Nifty has decisively broken that level and is currently trading below the 50-day moving average. Based on the weakness seen in the near-term charts, if we break below 24,800, the supply pressure could intensify further. The 24,000 level still holds the highest put-based concentration, so a break below 24,800 could open up more downside towards the 24,700–24,600 zone as this downtrend continues.
We are now entering the expiry week of this series, and considering the cut seen this past week, the broader market has also been under supply pressure. All these factors point to further weakness in the coming week—especially if we stay below the 25,000 mark for the next couple of days.
Even on the Bank Nifty front, we are now trading close to a major put-based concentration level of 56,500. The supply pressure seen throughout the session clearly indicates that there’s a possibility of breaking below 56,500 in the coming week. If that happens, the next put-based concentration is placed at 56,000, so another 500-point cut can’t be ruled out if we open Monday below 56,500.
Both indices are now trading near key support areas. The supply pressure seen in most large-cap stocks throughout the week signals the possibility of further downside in the coming sessions.
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Alongside the benchmarks, the broader markets also showed signs of volatility and closed in the red. Particularly in small caps, it was a straight six-day losing streak. For the entire week, we can say small caps underperformed. Given that, what is your view on the broader markets? Should one stay away from midcaps and smallcaps for now, given the volatility?
Rajesh Palviya: Yes, definitely. We’ve seen significant profit-taking in the Nifty Smallcap index, which is down around 3.5% this week. The Nifty Midcap index also corrected significantly. Both indices have now slipped below their 50-day moving averages. Given the kind of correction seen in the midcap and smallcap segments, we believe there could be further downside due to ongoing supply pressure.
Nifty too has broken an important support level, and this marks the fourth consecutive week of lower highs and lower lows—a clear sign of sustained selling pressure. The smallcap and midcap indices are also indicating the potential for further decline, especially as there is no strong support coming from earnings. In this scenario, both investors and traders are booking profits. So yes, we could see the broader market continue to correct in the coming week.
Pharma had been supporting the markets earlier, but not during Friday’s session or even this week. We’ve also seen banks and financials providing support at times, including PSU banks. If the market corrects further, do you think this could be a good opportunity to enter sectors like PSU banks or financials from a positional or long-term perspective?
Rajesh Palviya: If we analyze the banking sector, some private banks still look attractive. PSU banks have shown some buying interest, but they are mostly in consolidation mode. Stocks like Union Bank, Canara Bank, and SBI are still trading in a range, and breakouts are yet to happen.
If someone wants to play the banking space, private banks like ICICI Bank and HDFC Bank would be better bets. These stocks are trading above their breakout levels, and the buying action we are witnessing during rallies supports further upside. These two banks could be considered for long trades. This volatility might provide good entry opportunities at appropriate levels.
For those with a slightly longer-term perspective of three to six months, SBI is also well-placed around the 800–780 range. One could consider accumulating with a stop loss at 760. If SBI breaks above 830, we could see a strong rally there too. So yes, while PSU banks are consolidating, if markets recover, we believe private banks—particularly HDFC and ICICI—will take the lead.
Do you have any picks based on seasonality or other trading ideas you’d recommend?
Rajesh Palviya: For the coming week, I have two stock ideas—one long and one short.
On the long side, Fortis from the healthcare space looks very attractive. The stock is trading near its all-time high, showing a consistent higher-top, higher-bottom formation, and is moving within an upward-sloping channel on the weekly chart. There’s strong long build-up in the derivatives data as well. From a near to short-term perspective, one can buy and accumulate Fortis with a target of ₹880 and a stop loss at ₹820.
On the short side, Siemens is looking weak. The stock has broken below its 50-day and 100-day moving averages, and an important support level on the weekly chart. We expect further sell-off in the coming week. The next target is ₹2,970 on the downside, and the recommended stop loss for short positions would be ₹3,090.