Latest news with #Technical&DerivativesResearch
Economic Times
2 days ago
- Business
- Economic Times
Nifty ends 3rd straight week in red, bearish momentum strengthens below 20 DEMA: Sudeep Shah
Markets continued their downward trend for a third straight week, as investors remained cautious amid a weak start to the earnings season and persistent uncertainty over the US-India trade agreement. ADVERTISEMENT Like the previous week, the benchmark indices displayed some resilience during the first three sessions, but sentiment turned negative in the latter half. Consequently, both the Nifty and Sensex closed near their weekly lows at 24,968.40 and 81,757.73, respectively. Analyst Sudeep Shah, Deputy Vice President and Head of Technical & Derivatives Research, SBI Securities, interacted with ET Markets regarding the outlook on Nifty and Bank Nifty for the upcoming week. Here are the edited excerpts from his chat: The benchmark index Nifty ended in the red for the third consecutive week, reflecting sustained bearish sentiment in the market. On the weekly chart, it has formed a bearish candle with a lower high and lower low structure — a classic indication of downward momentum. Throughout the week, the index attempted three times to reclaim its 20-day EMA but was rejected on each occasion. It is now trading decisively below the 20-day EMA, which has started to edge lower, further reinforcing the bearish the upward slope of the 50-day and 100-day EMAs has begun to flatten, signalling a potential loss of medium-term momentum. This slowdown in the EMA slope suggests growing indecisiveness and weakening strength among bulls. On the momentum front, the daily RSI is quoting at 43, marking its lowest level since April 2025. Moreover, the RSI is trading below its 9-day average, and both are in falling mode, indicating weakening internal strength and reinforcing the ongoing bearish setup. ADVERTISEMENT Going ahead, Monday's trading session will be crucial for the index as heavyweights like Reliance Industries, HDFC Bank, and ICICI Bank are set to announce their Q1 results over the weekend. The reaction to these earnings could provide near-term direction and either amplify the current trend or spark a crucial levels, the zone of 24940-24900 will act as immediate support for the index, as it is the confluence of the 50-day EMA level and the 61.8% Fibonacci retracement level of its prior upward rally (24473-25669). If the index slips below the 24,900 level, then the next crucial support is placed at the 24,700 level. On the upside, the zone of 25,130-25,160 will act as an immediate hurdle for the index. ADVERTISEMENT Yes, one of the key developments to watch is the ongoing tariff-related discussions between India and the US. Any escalation or resolution in these talks could have a direct impact on trade dynamics, especially in sectors like pharmaceuticals, IT services, and industrial goods. ADVERTISEMENT The banking benchmark index, Bank Nifty, also extended its losing streak, ending in the red for the third consecutive week. On the daily chart, it witnessed a breakdown from a Rising Wedge pattern on Friday and also slipped below its 20-day EMA, which is a sign of growing bearish pressure.A key technical observation lies in the daily RSI behaviour. Despite a mid-week pullback, the daily RSI failed to surpass the 60 level, which is a bearish sign as per RSI range shift rules. Currently, the RSI is quoting at 45, its lowest level since March 2025, indicating a notable loss of momentum and growing weakness in the ahead, the 50-day EMA zone of 55,950-55,850 will act as immediate support for the index. If the index slips below the 55,850 level, then the next crucial support is placed at the 55300 level. On the upside, the 20-day EMA zone of 56,700-56,800 will act as an important hurdle for the index. ADVERTISEMENT In the cash segment, FIIs have offloaded equities worth nearly 17,000 crores so far this month, indicating persistent selling pressure. Simultaneously, in the derivatives segment, the FII long-short ratio has slipped to just 15%, the lowest in the recent period. This reflects an aggressive build-up of short positions and a cautious near-term outlook from institutional it's worth noting that historically, whenever the FII long-short ratio drops below the 15% mark, markets often witness a limited downside, as excessive pessimism tends to set the stage for short-covering rallies or a reversal in sentiment. While the current data suggests a bearish stance by FIIs, the extremely low long-short ratio also indicates that much of the negativity may already be priced in, leaving room for a potential bounce if a positive trigger emerges. Technically, Dalmia Bharat, Godrej Properties, Bajaj Finance, Chennai Petro, and Sumitomo Chemical are likely to continue their outperformance. Technically, BDL, HAL, and Shiriram Finance are looking good from a short-sell the short term, both stocks are bearish as they are quoting below their 20-day EMA level. The RSI of Axis Bank is quoting below 40, which is a bearish sign. Further, the Reliance daily RSI is quoting below its 9-day average. Currently, the major trend for both HDFC Bank and ICICI Bank remains sideways, reflecting a lack of strong directional bias. On the technical front, the daily RSI for both stocks is oscillating in the 40–60 range, indicating a phase of consolidation and indecisiveness among traders. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
12-07-2025
- Business
- Time of India
Nifty cracks 20-DMA amid bearish momentum, macro cues keep investors on edge: Sudeep Shah
Over the past week, benchmark indices faced profit booking at higher levels. The Nifty declined by 1.22%, while the Sensex shed 925 points. Among sectors, the FMCG index outperformed with a 2.20% gain despite the overall weak market sentiment. In contrast, the Defence and IT indices saw steep declines, falling 4.50% and 3.90%, respectively. Throughout the week, the market remained largely range-bound, but on Friday, it broke the crucial support level of 25,300/83,000, triggering intensified selling pressure post-breakdown. Analyst Sudeep Shah , Deputy Vice President and Head of Technical & Derivatives Research, SBI Securities , interacted with ET Markets regarding the outlook on Nifty and Bank Nifty, along with an index strategy for the upcoming week. Following are the edited excerpts from his chat: What is your view on the market with respect to the global scenario? At present, the Indian market is relatively underperforming its global peers, with several major global indices showing bullish momentum. This divergence highlights a phase of consolidation and cautious sentiment in domestic equities. Live Events Looking ahead, two key factors will drive the next directional move: Q1 Earnings Season – Investors will closely track corporate results for signs of margin stability, demand recovery, and management commentary, especially amid a mixed macro backdrop. Progress on the Tariff Front – Any clarity or resolution on global tariff-related tensions could significantly influence risk sentiment and capital flows. Until then, the market may remain range-bound, with stock-specific action dominating the trend. A breakout from this phase will likely be triggered by either strong earnings surprises or positive developments on the global trade front. What would say about Nifty, given its recent weakness, especially Friday's fall? The benchmark Nifty index spent the first four trading sessions of the week trapped in a tight 200-point range, reflecting the indecision among market participants. But on Friday, the calm broke. The index opened with a sharp gap down, slipped below its consolidation zone, and faced renewed selling pressure, signaling that sentiment is beginning to tilt in favor of the bears. What's more alarming is that Nifty has now slipped below its crucial 20-day EMA, which has also begun to slope downward — a classic sign of emerging weakness. The momentum indicators aren't painting a comforting picture either. The daily RSI has given a bearish crossover and continues to head south, while the MACD histogram has flipped into negative territory. Collectively, these signals suggest that downside momentum may be gaining strength. From a technical standpoint, immediate support now lies in the 24900–24850 zone, where the 50-day EMA is placed. A break below 24850 could push the index toward the next key support at 24550. On the flip side, a move above the 25300–25350 zone is required for bulls to regain control in the short term. Amid this technical caution, macro and earnings uncertainties are only adding to investor anxiety. With tariff uncertainty rising globally and Q1 earnings just getting started—kicked off by TCS on Thursday—markets are entering a critical phase. Investors are now watching for signs of margin pressures, global demand outlooks, and forward guidance from corporates. In this tug-of-war between technical breakdowns and earnings expectations, a cautious and stock-specific approach may be the best strategy for now. What does Bank Nifty indicate? Last week, the banking benchmark index Bank Nifty moved within a tight band of just 756 points, marking its narrowest weekly range since August 2024. This lack of movement reflects heightened indecision among market participants and a clear absence of strong directional cues from the banking space. On the weekly chart, the index has formed a small-bodied bearish candle with a long upper shadow, signaling that selling pressure is emerging at higher levels. This candlestick structure typically suggests profit-booking or cautious sentiment whenever the index tries to move higher. Currently, Bank Nifty is hovering around its 20-day EMA level, reinforcing the view that the trend is at a crucial inflection point. The momentum indicators are hinting at a lack of conviction. The daily RSI remains in a sideways zone, as defined by RSI range-shift principles, further underscoring the ongoing consolidation. Going ahead, the zone of 56200-56300 will act as immediate support for the index. While on the upside, the zone of 57100-57200 will act as a crucial hurdle for the index. A decisive breakout in either direction will lead to the trending move in the index. Would you say FIIs are backing the indian markets right now? At the moment, FII activity appears relatively subdued, reflecting a cautious stance from foreign investors. Barring some outflow on Friday, the overall participation has been muted over the last few sessions. This suggests that FIIs are likely adopting a wait-and-watch approach, especially in light of the prevailing global tariff uncertainty and lack of strong triggers in the domestic market. Until there is greater clarity on global trade dynamics and earnings visibility improves, sustained FII buying may remain limited, keeping the broader market in a consolidation mode. What are your views on the IT sector after TCS posted the earnings? Do you see any support from other IT majors like Wipro, Infosys, etc? Are any IT stocks looking well placed? Post the earnings from TCS, the overall sentiment in the IT sector remains cautious. The Nifty IT index is currently trading below both its short and long-term moving averages, with the shorter averages now beginning to slope downward — a sign of increasing pressure on the sector. Technically, the daily RSI is hovering near the 40 mark and showing signs of further weakness, which suggests that the sector could extend its southward move in the near term unless a strong catalyst emerges. As for broader sector support, other major names like Infosys, Wipro , and HCLTech are yet to show any meaningful signs of reversal or leadership and are largely mirroring the weak trend of the index. At present, no major IT stock stands out as convincingly well-placed, either technically or relatively, to suggest imminent outperformance. Until the index reclaims key moving averages and momentum indicators stabilize, it's advisable to stay cautious on the IT space and wait for clearer signals of bottoming or accumulation. Which sectors should the investors focus on amid the ongoing earnings? The Nifty India Defense Index has broken down from a 23-day consolidation zone on the daily chart — a clear bearish signal. This breakdown is further reinforced by the index slipping below its 20-day EMA, indicating a shift in short-term trend dynamics. Adding to the negative setup, the daily RSI is on the verge of falling below the 40 mark, suggesting weakening momentum. As a result, the index is likely to extend its southward journey in the coming sessions. In addition to the defense pack, Nifty IT and Nifty Oil & Gas indices also appear bearish and may continue to underperform in the near term, given their weak price structures and lackluster momentum indicators. On the flip side, a few sectors are showing relative strength. Nifty India Tourism, CPSE, and PSE indices are likely to outperform in the short term, supported by improving technical setups and stronger relative momentum. Any stocks within those sectors? Technically, Eid Parry, Medanta, Prestige, Ramco Cement, and Asahi India are looking good. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Economic Times
12-07-2025
- Business
- Economic Times
Nifty cracks 20-DMA amid bearish momentum, macro cues keep investors on edge: Sudeep Shah
Over the past week, benchmark indices faced profit booking at higher levels. The Nifty declined by 1.22%, while the Sensex shed 925 points. Among sectors, the FMCG index outperformed with a 2.20% gain despite the overall weak market sentiment. In contrast, the Defence and IT indices saw steep declines, falling 4.50% and 3.90%, respectively. ADVERTISEMENT Throughout the week, the market remained largely range-bound, but on Friday, it broke the crucial support level of 25,300/83,000, triggering intensified selling pressure post-breakdown. Analyst Sudeep Shah, Deputy Vice President and Head of Technical & Derivatives Research, SBI Securities, interacted with ET Markets regarding the outlook on Nifty and Bank Nifty, along with an index strategy for the upcoming week. Following are the edited excerpts from his chat: At present, the Indian market is relatively underperforming its global peers, with several major global indices showing bullish momentum. This divergence highlights a phase of consolidation and cautious sentiment in domestic ahead, two key factors will drive the next directional move: ADVERTISEMENT Q1 Earnings Season – Investors will closely track corporate results for signs of margin stability, demand recovery, and management commentary, especially amid a mixed macro on the Tariff Front – Any clarity or resolution on global tariff-related tensions could significantly influence risk sentiment and capital flows. ADVERTISEMENT Until then, the market may remain range-bound, with stock-specific action dominating the trend. A breakout from this phase will likely be triggered by either strong earnings surprises or positive developments on the global trade benchmark Nifty index spent the first four trading sessions of the week trapped in a tight 200-point range, reflecting the indecision among market participants. But on Friday, the calm broke. The index opened with a sharp gap down, slipped below its consolidation zone, and faced renewed selling pressure, signaling that sentiment is beginning to tilt in favor of the bears. ADVERTISEMENT What's more alarming is that Nifty has now slipped below its crucial 20-day EMA, which has also begun to slope downward — a classic sign of emerging weakness. The momentum indicators aren't painting a comforting picture either. The daily RSI has given a bearish crossover and continues to head south, while the MACD histogram has flipped into negative territory. Collectively, these signals suggest that downside momentum may be gaining a technical standpoint, immediate support now lies in the 24900–24850 zone, where the 50-day EMA is placed. A break below 24850 could push the index toward the next key support at 24550. On the flip side, a move above the 25300–25350 zone is required for bulls to regain control in the short term. ADVERTISEMENT Amid this technical caution, macro and earnings uncertainties are only adding to investor anxiety. With tariff uncertainty rising globally and Q1 earnings just getting started—kicked off by TCS on Thursday—markets are entering a critical phase. Investors are now watching for signs of margin pressures, global demand outlooks, and forward guidance from corporates. In this tug-of-war between technical breakdowns and earnings expectations, a cautious and stock-specific approach may be the best strategy for week, the banking benchmark index Bank Nifty moved within a tight band of just 756 points, marking its narrowest weekly range since August 2024. This lack of movement reflects heightened indecision among market participants and a clear absence of strong directional cues from the banking space. On the weekly chart, the index has formed a small-bodied bearish candle with a long upper shadow, signaling that selling pressure is emerging at higher levels. This candlestick structure typically suggests profit-booking or cautious sentiment whenever the index tries to move Bank Nifty is hovering around its 20-day EMA level, reinforcing the view that the trend is at a crucial inflection point. The momentum indicators are hinting at a lack of conviction. The daily RSI remains in a sideways zone, as defined by RSI range-shift principles, further underscoring the ongoing consolidation. Going ahead, the zone of 56200-56300 will act as immediate support for the index. While on the upside, the zone of 57100-57200 will act as a crucial hurdle for the index. A decisive breakout in either direction will lead to the trending move in the index. At the moment, FII activity appears relatively subdued, reflecting a cautious stance from foreign investors. Barring some outflow on Friday, the overall participation has been muted over the last few sessions. This suggests that FIIs are likely adopting a wait-and-watch approach, especially in light of the prevailing global tariff uncertainty and lack of strong triggers in the domestic there is greater clarity on global trade dynamics and earnings visibility improves, sustained FII buying may remain limited, keeping the broader market in a consolidation the earnings from TCS, the overall sentiment in the IT sector remains cautious. The Nifty IT index is currently trading below both its short and long-term moving averages, with the shorter averages now beginning to slope downward — a sign of increasing pressure on the the daily RSI is hovering near the 40 mark and showing signs of further weakness, which suggests that the sector could extend its southward move in the near term unless a strong catalyst emerges. As for broader sector support, other major names like Infosys, Wipro, and HCLTech are yet to show any meaningful signs of reversal or leadership and are largely mirroring the weak trend of the index. At present, no major IT stock stands out as convincingly well-placed, either technically or relatively, to suggest imminent outperformance. Until the index reclaims key moving averages and momentum indicators stabilize, it's advisable to stay cautious on the IT space and wait for clearer signals of bottoming or Nifty India Defense Index has broken down from a 23-day consolidation zone on the daily chart — a clear bearish signal. This breakdown is further reinforced by the index slipping below its 20-day EMA, indicating a shift in short-term trend dynamics. Adding to the negative setup, the daily RSI is on the verge of falling below the 40 mark, suggesting weakening momentum. As a result, the index is likely to extend its southward journey in the coming addition to the defense pack, Nifty IT and Nifty Oil & Gas indices also appear bearish and may continue to underperform in the near term, given their weak price structures and lackluster momentum the flip side, a few sectors are showing relative strength. Nifty India Tourism, CPSE, and PSE indices are likely to outperform in the short term, supported by improving technical setups and stronger relative Eid Parry, Medanta, Prestige, Ramco Cement, and Asahi India are looking good. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
Economic Times
28-06-2025
- Business
- Economic Times
Nifty futures rollover climbs to 79.53%, signals trader confidence ahead: Sudeep Shah
Markets finally broke out of their five-week-long consolidation phase, supported by improving global sentiment, easing geopolitical tensions, and renewed buying interest from foreign institutional investors (FIIs) in the latter part of the week. The rebound followed a cautious start, with broader participation seen midweek as sentiment turned positive. ADVERTISEMENT Indices gained traction as concerns over Iran-Israel tensions began to subside, prompting a recovery in global risk appetite. As a result, benchmark indices closed the week on a strong note, with the Nifty ending at 25,637.80 and the Sensex at 84,058.90—both near their respective weekly highs. With this, Analyst Sudeep Shah, Deputy Vice President and Head of Technical & Derivatives Research, SBI Securities interacted with ET Markets regarding the outlook on Nifty and Bank Nifty along with an index strategy for the upcoming week. Following are the edited excerpts from his chat: The squeeze sets the stage—the breakout steals the show. For 31 trading sessions, the Nifty moved in a narrow consolidation range, building silent pressure with every passing day. Like an audience holding its breath before the climax, the market was coiling, waiting for a trigger. That moment finally arrived this week, as Nifty broke free from its range-bound structure, delivering a sharp upside move that ended the week above the 25,600 mark, with a 2.09% importantly, this move led to the highest weekly close since September 2024, confirming that the breakout wasn't just symbolic—it was structural. On the weekly chart, the index has formed a sizeable bullish candle, a visual expression of strong momentum and renewed buying conviction. ADVERTISEMENT This breakout was not an isolated event. It comes with improving breadth across sectors such as Financial Services, Private Banks, Oil & Gas, Infrastructure, and Auto, many of which have also seen breakout patterns of their own. Backed by strong technical indicators and firm sectoral participation, Nifty now looks poised to extend its northward journey in the coming weeks and is likely to test the level of 25,800, followed by 26,100 in the short term. While on the downside, the zone of 25,400-25,350 is likely to provide a cushion in case of any immediate decline. ADVERTISEMENT Throughout the June series, Nifty futures largely remained confined within a narrow trading band of just 732 points, reflecting a phase of indecisiveness and range-bound activity. Since mid-May, the index has been oscillating in a tight consolidation zone between 25,307 to 24,575 levels, suggesting a lack of clear directional bias among market participants. Notably, during these 31 trading sessions, the price action was characterized by frequent gap-up or gap-down openings, indicating elevated overnight volatility driven by trade war concerns, the escalation of war in the Middle East, and institutional flows. However, despite these volatile starts, the intraday moves largely lacked sustained momentum, reflecting traders' hesitancy to commit in either direction. ADVERTISEMENT However, on the expiry day, the Nifty futures finally staged a decisive breakout from this prolonged consolidation phase and ended the June series above the 25,500 mark, registering a healthy gain of 2.69%. This breakout not only signals a potential shift in short-term sentiment but also sets a positive tone for the July series. From a derivatives perspective, the rollover of Nifty Futures increased to 79.53% in June, slightly higher than May's 79.10% and also above the three-month average of 79.24%, indicating continued participation and positioning by traders heading into the new number of shares rolled surged to 162 lakhs compared to 149 lakh last month. However, the rollover cost dipped to 0.25%, below the three-month average of 0.43%. ADVERTISEMENT Bank Nifty Futures traded in a narrow 1,800-point range during the June series, marking the second straight month of muted price action. However, it gained momentum on the expiry day, closing above 57,200 with a 2.48% gain. From a derivatives standpoint, the rollover of Bank Nifty Futures declined to 75.75% in the June series — a noticeable drop compared to May's 79.29% and also below the three-month average of 76.70%. This suggests a relatively cautious stance among traders and possibly a lighter carry-forward of positions into the July to this, the rollover cost dipped to 0.07%, significantly lower than the three-month average of 0.32%, reflecting a cautious rollover with limited aggressive long Nifty has been displaying notable strength lately, backed by a series of compelling technical indicators. Most prominently, the index has registered fresh all-time highs over the last two trading sessions—clearly outperforming the broader Nifty index, which remains nearly 2.5% below its own record high. This relative outperformance reflects strong sectoral leadership from banking stocks. A key bullish trigger has been the recent Stage-2 cup pattern breakout on the daily chart—a well-known continuation formation that typically precedes a strong upward trend. Furthermore, Bank Nifty continues to trade above all its crucial short-term and long-term moving averages, signaling well-supported price action. Momentum indicators such as RSI and MACD remain firmly in bullish territory on both daily and weekly timeframes, highlighting sustained strength and trend acceleration. In summary, the alignment of breakout patterns, moving average support, and strong momentum across timeframes suggests that Bank Nifty is likely to maintain its bullish trajectory. As per the measure rule of cup pattern, the upside target is placed at 59,000 level. While, on the downside, the zone of 56,800-56,700 is likely to provide the cushion in case of any immediate decline. They have now turned net buyers for the fourth consecutive month, signaling a steady return of confidence in Indian equities. This sustained inflow reflects their growing conviction in the strength and resilience of the domestic market, especially amid global uncertainties and policy in the derivatives segment, the FII long-short ratio in index futures has climbed to 38.43%, marking one of the highest levels seen in the recent past. A rising long-short ratio indicates that FIIs are increasingly building long positions—a bullish sign that suggests they are anticipating further upside in the near combination of consistent cash market inflows and a favorable derivative positioning reinforces the broader sentiment that FIIs are aligning themselves with India's structural growth story and short-term momentum. If this trend continues, it could provide further support to the market's upward trajectory. Nifty Private Bank, Nifty Financial Services, Nifty Oil & Gas, and Nifty Infrastructure have all registered horizontal trendline breakouts on the daily chart. This is a bullish development, indicating a shift from consolidation to potential upside momentum. Nifty Auto has given a downward sloping trendline breakout, another positive sign. The daily RSI is in the bullish zone and trending higher, reinforcing the likelihood of continued strength in this space. Nifty India Tourism is on the verge of breaking out from a symmetrical triangle pattern on the daily timeframe. All major moving averages and momentum indicators are aligned positively. A sustained move above the 9300 level could trigger a fresh bullish leg in the index. In addition to the above, Nifty Healthcare, Pharma, and Metal indices are also showing signs of relative strength and are expected to outperform in the near term, backed by improving price structures and momentum indicators Currently, the Nifty Metal is trading above its short and long-term moving averages, which is a bullish sign. Further, the daily RSI is in bullish territory, and it is in rising mode, which is a bullish sign. However, on Friday, the index has witnessed minor profit booking after reaching a high of 9,678. Going ahead, any sustainable move above the level of 9700 will lead to a sharp upside rally in metal space. APOLLOHOSP: On a daily scale, the stock has given an Ascending Triangle pattern breakout along with robust volume. Currently, the stock is trading above all the moving averages, and these averages are in rising mode. The Daily RSI has also given a 2-month consolidation breakout, which suggests pickup in upside momentum. Hence, we recommend accumulating the stock in the zone of Rs 7,320-7,280 level with a stoploss of Rs 7,080. On the upside, it is likely to test the level of Rs 7,750 in the short term. Technically, Hindustan Petroleum, HDFC Life, Ultratech Cement, ICICI Prudential Life Insurance, Indigo, Ambuja Cement, LT Foods, and Glaxo are looking good. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
14-06-2025
- Business
- Time of India
Nifty's narrow range breaks on Iran-Israel tensions; 24,450–24,500 emerges as key support: Sudeep Shah
Markets remained under pressure and ended the week in the red, with both benchmark indices slipping by over a percent. The decline was largely driven by rising geopolitical tensions and mixed global cues. After opening the week on a cautious note, the indices saw heightened volatility and eventually closed near their weekly lows. The Nifty settled at 24,718, while the Sensex ended at 81,118 — both marking a sharp pullback from their recent peaks. Amid this broader market weakness, select smallcap stocks managed to buck the trend. Several counters across sectors like electricals, IT, finance, and construction materials posted sharp gains, delivering weekly returns of 20–28%. These pockets of strength stood out as investors selectively chased momentum despite the overall risk-off mood. With this, Analyst Sudeep Shah , Deputy Vice President and Head of Technical & Derivatives Research, SBI Securities interacted with ET Markets regarding the outlook on Nifty and Bank Nifty along with an index strategy for the upcoming week. Following are the edited excerpts from his chat: As the Iran-Israel war unfolds, what's your take on the global markets and picture right now? As the Iran–Israel conflict unfolds, global markets have entered a risk-off mode. Investors are responding to fears of broader geopolitical escalation across the Middle East. Crude oil prices have surged above their 200-day EMA level for the first time since January 2025, raising concerns about inflation and supply disruptions. Equities across the U.S., Europe, and Asia have seen sharp declines, while safe-haven assets like gold are gaining strength, and they are likely to test all-time high levels. Bond yields have also moved higher, reflecting heightened uncertainty. Volatility is expected to remain elevated in the short term, with sentiment driven largely by geopolitical headlines. Until clarity emerges, markets are likely to remain nervous and defensive. What about Nifty? Does the general upward view remain intact? In the first three trading sessions of the week, the benchmark index Nifty hovered near its 8-month high, yet remained confined within a narrow range of just 167 points. This tight consolidation reflected a clear state of indecision and a lack of strong conviction among market participants, as neither bulls nor bears were willing to take aggressive positions. However, the calm broke on the weekly expiry day, when the index slipped below the consolidation zone, triggering a sharp intraday correction. The downside momentum intensified further on Friday after news reports confirmed that Israel had conducted airstrikes on Iran. This unexpected geopolitical escalation spooked investors and led to a broad-based sell-off across global markets, including a steep gap-down opening in our market. Amid the global selloff, Nifty once again found support in the 24500–24450 zone — a crucial level that has acted as a reliable cushion multiple times over the past 23 trading sessions. Staying true to recent patterns, the index staged a strong rebound from this zone, recovering more than 240 points intraday and managing to close above the 24700 mark. This recovery, though impressive, was not strong enough to decisively shift the trend, especially with external risks still looming. Despite the bounce, the index continues to trade below its 20-day EMA, and the daily RSI remains directionless in a sideways range, indicating a lack of strong momentum on either side. The overall chart structure suggests that the market is currently positioned in 'no-man's land' — stuck between key support and resistance levels, making directional conviction difficult. Given the heightened geopolitical uncertainty and muted technical indicators, caution is key. Traders are advised to adopt a wait-and-watch approach in the next couple of sessions until a clear breakout or breakdown confirms the next leg of the move. Talking about crucial levels, 24500-24450 will act as crucial support for the index. If the index slips below the level of 24450, then the next important support is placed at the 24200 level. While on the upside, the zone of 24850-24900 will act as an immediate hurdle for the index. If the index sustains above 24900, then it is likely to resume its northward journey. In that case, it is likely to test the level of 25200, followed by 25500 in the short term. How about Bank Nifty? How does it seem to be placed? The banking benchmark index, Bank Nifty, registered a fresh all-time high of 57049, but has since started forming lower highs and lower lows on the daily chart. This price action has resulted in a Bearish Engulfing pattern on the weekly chart—typically a bearish reversal signal that appears after an uptrend. Adding to the cautious outlook, the index has slipped below its 20-day EMA for the first time since May 9, 2025. Moreover, the daily RSI has given a bearish crossover and is trending lower, indicating limited upside potential in the near term. Going ahead, the 55100–55000 zone will serve as immediate support. A breakdown below 55000 could open the door for a further decline towards the 54400 level. On the upside, the 20-day EMA zone of 55700–55800 will act as a key resistance area. Any sectors you think would specifically suffer from this war? If the Iran–Israel conflict escalates further, several sectors could face significant pressure. Oil Marketing Companies like IOC, BPCL, and HPCL may see margin erosion due to rising crude prices, as retail fuel prices are often regulated. Airlines and logistics firms could suffer from increased fuel costs, impacting profitability. The auto sector might experience reduced consumer demand and higher input costs. FMCG and chemical companies could also feel the pinch from costlier transportation and packaging. Additionally, the cement and infrastructure sectors, being energy-intensive, may face margin compression. Overall, sectors with high fuel dependency and price sensitivity are most vulnerable in this scenario. View on defence sectors amid rising global tensions? The defence sector stands to benefit amid rising global tensions like the Iran–Israel conflict. Increased geopolitical risks often lead to higher government spending on defence and security. Technically, the Nifty India Defence index has taken support near its 20-day EMA level and thereafter witnessed a smart rebound. The daily RSI has taken support near the 60 mark and witnessed a bounce, which is a bullish sign as per RSI range shift rules. Hence, we believe that the defence space is likely to outperform in the short term. What's your view on OMCs with such a surge in the Brent Crude? With Brent crude surging due to the Iran–Israel conflict, the outlook for OMCs like IOC, BPCL, and HPCL turns negative in the near term. Rising crude prices squeeze marketing margins, especially when retail fuel prices aren't revised due to political sensitivity. This can significantly impact profitability. Unless there's a pullback in crude or fuel price adjustments are made, OMCs may continue to underperform. How are aviation stocks likely to perform given the backdrop of war and rising crude prices as well as the tragic Air India incident? Aviation stocks are likely to face near-term pressure due to rising crude prices, which drive up costs and hurt margins. The Iran–Israel conflict adds geopolitical risk, while the tragic Air India incident may dampen sentiment and invite regulatory scrutiny. Overall, expect aviation stocks to underperform unless crude stabilises and sentiment recovers. What sectors are you now focusing on? Nifty IT has significantly outperformed the frontline indices over the past week. The ratio chart of Nifty IT versus Nifty has broken out of a consolidation phase, reinforcing this outperformance. The index is currently hovering near its 200-day EMA, while the daily RSI remains in bullish territory. This setup suggests that outperformance is likely to continue in the coming sessions. Beyond IT, both the Nifty Pharma and Healthcare sectors are also showing signs of relative strength and are expected to outperform in the near term. On the other hand, Nifty FMCG has breached an upward-sloping trendline and slipped below key moving averages. Additionally, its daily RSI has dropped below the 40 level and continues to decline, indicating potential underperformance in the short term. Any stocks within those sectors? Technically, Max Health, HCL Tech, Tech Mahindra , Glenmark, 360 One Wealth, and Supreme Industries are looking good. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
