Despite new highs, momentum missing in market: Vinay Rajani

The domestic market struggled to hold its footing on Tuesday as the Nifty slipped below levels once seen as firm support. Just a day earlier, the index had touched a fresh all-time high near 26,330, only to retreat sharply as global cues turned unfavourable. Analysts now caution that while the headline index remains resilient, the broader market continues to show signs of strain.

Speaking to ET Now, Vinay Rajani from HDFC Securities said the pullback lacked conviction. “Yesterday Nifty hit an all-time high at 26,330 odd levels but did not sustain at higher levels and in fact has come down and momentum is clearly lacking,” he noted. According to him, the core concern is the absence of participation from the midcap and smallcap segments, which has become a “weak link” even as the frontline index climbs.

Rajani highlighted that global sentiment has been a major driver of the recent move. “Just because of the global cues we are rising, but as we can see today, yesterday we saw US market closed in a red and today Asian markets have also come in red, so we are correcting with them,” he said, adding that India remains “one of the underperforming in this entire 2025.”

Despite the current pressure, Rajani believes the Nifty is still holding onto a constructive trend. He pointed to the 20-day exponential moving average as a crucial area. “There is a strong support between 25,970 to 26,050… that low is around 25,842, so that should be the stop loss in trading long position,” he said. For traders, he maintained that “26,000, 26,050 is a strong support… and any long position in Nifty should have a stop loss of 25,840.”

Rajani added that while sentiment is soft, the index is “down, but still not out because positional trend is still bullish.” However, he advised avoiding midcaps and smallcaps for now, given the lack of momentum and difficulty in generating alpha in those pockets.

Stock Ideas: One Long, One ShortWith the market offering a mild pullback, ET Now asked Rajani about opportunities worth considering. He reiterated his preference for PSU banks. “Canara Bank is one of the stock which we like technically, placed above all moving averages,” he said, adding that indicators remain strong. He recommended a long trade around ₹153.5, with a stop loss at ₹150 and a target of ₹158.50.

On the short side, Rajani highlighted weakness in aviation. “IndiGo Airlines. The upwards sloping trend line has been violated and looks weak,” he observed. He suggested shorting the December futures around ₹5730, keeping a stop loss at ₹5830 and targeting ₹5600.

As the market continues to digest global volatility, analysts believe that defending 26,000 will be crucial in maintaining the bullish structure of the Nifty. Whether the broader market joins the party remains the bigger question for investors heading deeper into the December series.