The benchmark indices, the Sensex and the Nifty, witnessed notable volatility through the week, eventually closing lower as investors reacted to uncertainties over U.S. tariff developments.
Analyst Rahul Ghose, Founder and CEO, Octanom Tech and Hedged.in interacted with ET Markets regarding the outlook on Nifty and Bank Nifty along with an index strategy for the upcoming series. The following are the edited excerpts from his chat:
How is Nifty positioned technically as we step into the June series?
The Nifty 50 index is currently in a consolidation phase, trading between 24,462 and 25,116, reflecting market indecision. The series of Dojis and spinning tops on the daily and weekly time frame further suggests that markets are likely to stay range-bound in the short to medium term. Key support resides at 24,164-23,935, while resistance is seen at 25,070 to 25,150. The June F&O series begins with elevated open interest (1.26 crore shares) but reduced FII long positions compared to previous months. Historically, June has been favourable, with three positive returns in the last four years. Nifty can head to 25,740, once we see two closings above the 25,100 mark, until then one should only look to be in hedged positions.
Bank Nifty was eyeing its all-time high recently — how does the setup look now?
Bank Nifty is consolidating between 53,500 and 56,000 with a series of indecisive candles. A sustained move above 56,100 (which is the high of the bearish engulfing candle) could trigger a rally toward 56,700. Bank Nifty looks likely to break out.
What signals are you getting from recent FII activity?
FIIs reduced Nifty long positions to half of April/May levels, indicating caution. However, their net buying in April-May (Rs 25,841 crore) and focus on the RBI policy (June 6) and monsoon progress suggest potential catalysts for renewed momentum.
Given the current structure, is there more clarity in trading the index or individual stocks?
The index’s rangebound action (24,160–25,100) favours stock-specific opportunities, particularly in sectors like IT and pharma, showing relative strength. Index traders should wait for a confirmed breakout/breakdown. A move below 23,900 levels will open the opportunity for further downside where whereas a move above 25,100 levels would lead to an upside. The bigger time frame price action suggests that, probability of Nifty moving towards the upside is much higher than the downside.
Let’s talk about some heavyweights — what’s the technical setup for RIL right now?
RIL is forming a symmetrical triangle on the daily chart and is currently testing the upper boundary near Rs 1,440. A breakout above Rs 1,440 with volume confirmation could lead to a move toward Rs 1,530-1,550 levels. The stock is holding above its 50-DMA and showing positive RSI divergence on the hourly chart — a sign of latent strength. Short-term support lies at Rs 1,396-1,390 levels.
How does HDFC Bank look on the charts?
Just like RIL, HDFC Bank is trading in a symmetrical triangle formation. A break above 1980 levels with good volumes could lead the stock towards newer highs. Rs 1,980 happens to be a short-term resistance for the stock with a strong engulfing bear candle. As Bank Nifty is expected to remain bullish, HDFC Bank is likely to break out sooner rather than later.
What’s your technical view on ICICI Bank?
ICICI Bank is slightly overstretched on the monthly & quarterly time frames. The RSI levels on a monthly basis are around 75, and quarterly, around 85. Since structurally it is in a strong uptrend, one should look to enter on a pullback rather than impulsively jumping around the CMP. Rs 1,300-1,320 area would be a good level to enter.
How is Bharti Airtel trading technically?
The stock is in a strong uptrend on all time frames. However, considering the vertical rally in the stock recently, buying in a staggered manner would be a better approach.
Let’s have your view on the companies that have reported their Q4 earnings recently. What are the chart signals saying for Suzlon?
The bigger time frame charts of Suzlon are bullish and the stock could continue to trade with a strong momentum. The weekly and monthly RSI levels of Suzlon are above 60, suggesting a strong uptrend. Friday closed with a Gravestone DOJI candle after a strong gap up, signalling the stock could pull back in the short term. A pullback towards 58-60 would be a good opportunity for re-entry.
Ola has been in focus — is there a tradable structure visible on the charts?
Ola continues to make lower tops and lower bottoms on a daily and weekly time frame. The buying structure is clearly not visible on price charts. Such stocks are better entered when the stock breaks out post some sort of base formation, like it happened in Nyka or Zomato. Currently, this is not visible in Ola.
What’s the technical outlook for Mazdock right now?
Technically, Mazdock is extremely strong and all pullbacks will be potential buying opportunities. With the recent rally, the indicators have obviously entered an overbought territory, which means traders should only look to enter such stocks on a pullback. On charts,a pullback to the levels of Rs 2,800-2,900 would be a good point to enter. This level has a confluence with the 50 DMA & offers a good reward to risk ratio.
How is Bajaj Auto positioned technically after its recent moves?
Bajaj Auto is currently trading around the monthly 20 EMA & has been consolidating around that level for 2-3 months. The stock might continue to hover around this range before moving up again. Overall, technically, the stock looks positive.
With the earnings season largely behind us, how are the key sectoral charts shaping up?
Among the sectors, Nifty Bank, Nifty IT and Nifty metals look positive on charts, whereas Nifty FMCG & Nifty Auto look negative. Nifty Auto and FMCG are showing signs of consolidation on monthly charts & one needs to be very selective while picking stocks in these sectors. Nifty IT & Nifty metals look to be in strong momentum, trading close to their key averages. Any pullbacks would be an opportunity to buy.
What are your top technical picks in the IT space — both largecaps and midcaps?
Top IT Picks: Largecaps (Infosys, TCS) for stability; midcaps (Coforge, Persistent) for breakout potential.
Which stocks are currently showing strong technical setups or breakout potential?
HDFC Bank & Reliance, both heavyweights, look to be on the verge of a breakout on the daily charts. Cummins looks to be a strong momentum play and has huge potential in the short to medium term. The stock has just come out of a base formation on weekly & is showing signs of moving towards Rs 3,700-4,000 levels in the short-term
Finally, what can be a go-to strategy for the tarders to navigate the June series?
Nifty: Trade the range (24,400–25,100) with stops. Go long above 25,100& short below 23900 levels.
Sector – Overweight on Banking & Midcap IT, Underweight on FMCG.
Trade with tight stop losses. Be willing to change stance from bullish to bearish and vice-versa if the market breaks key levels on either side
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
