Nifty eyes 26,500 after breakout; Jio may stretch rally to Rs 345: Anand James of Geojit

Time of India

a day ago

After a 31-day snooze in consolidation mode, the
Nifty
finally jolted awake on the June expiry day, breaking past resistance with a burst of momentum. But is this just a sugar rush or the start of a sustained sprint? Anand
James
, Chief Market Strategist at
Geojit Financial Services
, believes the broader trend still has legs—pointing towards 26,500, if investors hold their nerve and resist the itch to book profits too soon.
Meanwhile,
Jio Financial
, one of the week's top gainers, may still have some juice left in the tank, though James warns the momentum isn't strong enough for fresh entries just yet. In a chat with
ET Markets
, he decodes the July setup, the FII shift, and his top trading picks.
Nifty broke 31-day consolidation phase on the day of June monthly expiry on Thursday. How do you read the momentum building for the July series now?
The week closed on a positive note with 79% and 69% of Nifty 500 stocks closing above their 10 and 20 DMAs respectively, the highest noted last week. But a withdrawal in buying interest was noted towards the close. While about 29% of Nifty 500 stocks pushed above the upper Bollinger band, only 11% managed to close above the same. Also, more than 66% of Nifty 500 stocks pulled back at least 1% from their day highs. With this in the backdrop, it is notable that Nifty is now at the farthest from its 10 DMA, since 15 May, after we had entered a period of consolidation. We expect the same in the coming week. That said, we remain optimistic of a broader trend extending to 26,200-500, after the consolidation.
Looking at the rollover data, the FII long-short ratio surged suggests fresh long positions are building up. How do you read FII positioning?
Having hovered around 20 or below for the most part of June, the sudden rise of the long short ratio to 38 suggests that FIIs are more optimistic. Though long positions are yet to be added in significant amounts, the covering of shorts have been large enough to at least suggest that the bearish fears have significantly come down.
July month typically has a positive seasonality for Nifty as well as Nifty Bank. The banking index has already hit a fresh record high. Will July bring in the good news for Nifty as well?
July continues to look favourable for Nifty, supported by strong internal breadth and leadership from Bank Nifty. In terms of trend strength, 100% of
Bank Nifty
stocks are above the 10-DMA, 83.33% above the 20-DMA, and 91.67% above the 50-DMA—a clear indication of persistent buying. Nifty, meanwhile, holds up well similarly: 82% of its stocks are above the 10-DMA, 86% above the 20-DMA, and 78% above the 50-DMA. Also worth noting, 24% of Nifty stocks are trading above the Upper Bollinger Band, compared to just 16.67% in Bank Nifty, hinting at some near-term overbought conditions in Nifty. Looking at weekly performance, Bank Nifty and Nifty 50 show dominant price action, with 84% of Nifty 50 and 100% of Bank Nifty closing above the previous week's close, confirming solid upward momentum. Historically, July has been a bullish month for both the Nifty 50 and Bank Nifty indices. Over the past 15 years, Nifty 50 has delivered positive returns 73% of the time, with an average gain of 4%. This trend is often attributed to a post-June recovery and as early Q1 earnings optimism tends to fuel investor sentiment, contributing to upward momentum. Bank Nifty, known for its higher beta and sensitivity to economic cues, has outperformed Nifty 50 in most bullish Julys. It has posted gains 66% of the time, with an average return of 4.5% in July. Bank Nifty has historically delivered an average return of 8.6% in Q2, with 60% of the years showing positive performance. Meanwhile, Nifty 50 has been positive 73% of the time in Q2, with an average return of 7%.
With July's typically bullish seasonality in play, if broader participation improves and investors avoid heavy profit booking, Nifty could join the rally and possibly move toward new highs.
Jio Financial was one of the top Nifty gainers in the week and ended 10% higher. Study the charts for us please and tell us how strong the momentum looks like for the new week?
Two consecutive days of close above upper Bollinger band shows strength but directional moving indicators suggest that momentum is not strong enough to warrant new entry now. Ideally, Rs 321-323 region presents an exit point for those who may have entered the stock in June. For those willing to press on with their existing positions in order to capitalise on a potential extension in uptrend, Rs 341-345 may be marked as the nearest objective, but we do not see any reason to place the stop loss any lower than Rs 314.
Give us your top ideas for the week ahead.
ROUTE (CMP: 999)
View: Buy
Target: 1200
SL: 899
The base-building phase that began in March is still ongoing. Recently, the stock bounced off the trendline support at 964 and appears to be setting up for a potential pullback. The daily SMIO is nearing a move above the zero line, and the monthly chart has formed an inverted hammer candlestick pattern—often considered a reversal signal—supporting our pullback assumption.
We expect the stock to move towards 1,200 in the near term. All long positions should be protected with a stop-loss placed below 899.
JBMA (CMP: 642)
View: Buy
Target: 665/698
SL: 614
The stock has been on a pullback phase since May and is currently approaching the 50% Fibonacci retracement level, indicating a potential reversal. The daily MACD histogram is showing early signs of exhaustion at lower levels, while the 14-day RSI has reversed from the oversold region—both hinting at a possible gain in momentum in the coming days.
We expect the stock to move towards 665 and 698 in the coming weeks. All long positions should be protected with a stop-loss placed below the 614 level.