Edited excerpts from a chat:
Nifty has given negative weekly endings for two consecutive times. How would you go about dealing with the index this week?
Friday’s upmove was encouraging, though not large enough to avoid the week closing in the red for the second consecutive week. In fact the clear break beyond a three day consolidation has given hopes towards a strong uptrend, aiming 26500-27200. However, it cannot be ignored that the previous Friday too had closed on a strong note, raising bullish vibes. But, being in the vicinity of a declining parallel trendline, just as last Friday, a decline ensued in the next few days, which could be expected in the coming week too. We are guarded towards this end, against too much optimism. Inability to clear 26190 will be taken as loss in momentum, while a direct fall below 25970 could invite long liquidation.Defence stocks have seen selling pressure. Do you see chances of bottom fishing?
The Nifty Defense Index has been trading within a narrow band since September, attempting to establish a base near the 7,400 support zone. On the daily charts, this week appears to be marked by consolidation following Monday’s decline. However, the weekly charts have triggered a bearish PSAR breakout, suggesting that downside pressure could persist this week. Any rebound attempts are likely to encounter resistance around the 7,700 level.
From a derivatives standpoint, Friday’s data showed that nearly 70% of defense stocks witnessed long positions, while the broader weekly trend reflected short additions. Furthermore, close to 80% of near OTM call strikes saw short build-up, reinforcing expectations of continued weakness among derivative traders.
On the stock-specific front, HAL, BEL, Mazdock, BDL, Cochin Shipyard, and GRSE appear vulnerable and may attract further selling in the weeks ahead. Conversely, Solar Industries could provide some support as buying interest is likely to emerge soon.
How do you read the metal rally? Does it display signs of more legs?
The Nifty Metal index broke out of its consolidation range on Friday, forming a strong bullish Marubozu candle. On the weekly charts, the index also closed above the declining trendline resistance, reinforcing a bullish outlook.
Derivative data shows that nearly 70% of stocks added long positions on Friday, and about 70% exhibited either long buildup or short covering on a week-on-week basis, suggesting traders are positioning for further upside in the coming weeks.
From a stock-specific perspective, counters such as Adani Enterprises, JSW Steel, Tata Steel, Vedanta, Hindalco, and Jindal Steel have formed strong reversal patterns on both daily and weekly charts, favoring continued gains in the near term.
IndiGo shares are under selling pressure as investors fear market share loss. How to trade the stock now?
Prolonged selling since late November had pushed the oscillators to oversold levels. Such conditions were prevailing for a few days now, but with positive divergences appearing, the set up now favours a pull back, ideally returning to 5280 levels. Downside markers may be placed near 4730.
Hindustan Zinc shares have been on a sustained rise given the jump in silver prices. Is it time to book profits?
Being at the neckline of a rounded reversal pattern that has been in formation since October 2024, it would be advisable to take some cash off the table, as a bit of profit booking is to be expected. That said, oscillators favours continuing uptrend aiming 630, should decline not extend beyond 515.
Give us your top ideas for the week ahead.
ANANTRAJ (CMP: 550)
View: Buy
Target: 580-600
SL: 514
The stock had been in a downtrend since October but started forming a base earlier this week. It has now created a strong bullish candle on the daily chart, supported by robust volumes and a breakout above the PSAR level, signaling an attempt at reversal by strong hands. On the weekly chart, a hammer pattern has emerged, further reinforcing expectations of an upward move.
We anticipate the stock to advance towards 580 and 600 in the near term. All long positions should be safeguarded with a stop-loss placed below 514.
SEQUENT (CMP: 209)
View: Buy
Target: 220-225
SL: 204
The stock has been under profit booking since November but now appears to be attempting a pullback. On the daily chart, we have observed a PSAR breakout, while the weekly chart shows a bounce from the rising trendline support—both signaling potential upside in the coming week.
We expect the stock to move towards 220 and 225 in the near term. Long positions should be protected with a stop-loss placed below 204.
