Stock market open for only 3 days this week. Anand James on how to trade Nifty

Edited excerpts from a chat:

Any uptick in the market is being followed by selling. In such a situation, how would you trade Nifty in monthly expiry?

Barring a few days in the first half of February, Nifty has not been able to float above 10 day SMA, pointing to how bearish the trend has been so far this year. The deep pull back from the vicinity of 10 day SMA on Friday, scything through several supports has widened sigma and the possibility of range expansion, forcing us to bring 22200-21900 into the picture. This being the default view, let us look at the reversal chances.

This month, we have had two attempts to breach the 10 day SMA, only to find hammering again. We see the twin attempts within the span of a month as a sign that risk on approach has begun to surface after a depressing year so far.

Also, 30% of Nifty50 stocks are still above the 10 day SMA. Chop index has begun to show signs of peaking suggesting a breakout from the existing range and bias. This gives us a potential target of 23800 and an optimistic objective of 24440. We will however require out for consistent trades above 22680 or a push beyond 23300 before riding such an upside view. Else, the default view will take precedence.

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The week will have only 3 trading days. Do shorter trading weeks amplify the risk of deferred market reactions to global events, and how should traders position themselves amid ongoing volatility in geopolitics and crude oil?

There is always a risk of deferred market reactions to global events during shortened trading weeks. Looking at the data from the last five years, there were five instances when the Nifty50 traded for only three days in a week, while major global markets such as the Dow Jones and Nikkei traded all five days. Across these instances, the risk of deferred reactions was amplified rather than reduced, as global markets completed full price discovery while India had fewer sessions to absorb the same information.

Consequently, the Nifty50 either reacted more sharply within a compressed timeframe or under‑reacted relative to global peers, leaving part of the adjustment unresolved. This time, the risk is further elevated due to three settlement holidays on 31 March, 1 April, and 3 April, which restrict effective risk transfer, margin adjustments, and delivery finality even on trading days which could prompt traders to reduce or avoid delivery trades and stick to intraday trades.Taken together, fewer trading sessions and disrupted settlement mechanics increase the likelihood that global shocks or trends may not be fully priced in during the week and instead manifest as sharper moves or gaps once normal trading and settlement resume.

Nifty IT has been a relative outperformer as investors are probably seeing it as a defensive play and buying at lower levels. What are the charts indicating at?

Nifty IT Index’s chart suggests that its recent upswing that helped it outperform the broader market is yet to fully form into a reversal. On the daily timeframe, the index has found support around the 28,500-29,000 zone, triggering value buying at lower levels, but prices remain below major moving averages and a falling trendline, indicating that the rebound is still fragile.

On the weekly chart, the index remains in a broader corrective structure, having broken down from a long-term rising channel, which points to distribution, making the ongoing move look more like a pullback within a downtrend unless the index reclaims and sustains above the 31,500-32,000 resistance band.

Overall, the relative strength versus the broader market appears driven by defensive rotation and bottom-fishing, implying near-term stability and relative resilience, but absolute upside is likely to remain capped without a decisive breakout above key resistance levels.

PSU bank stocks are on a downward trajectory. Do you see chances of buying at lower levels in the week ahead?

Nifty PSU Bank Index remains in a corrective phase after a strong medium-term uptrend, with charts indicating loss of momentum at higher levels. On the daily chart, the index has broken below its recent swing support and key short-term averages and is currently trading near the 8,200-8,300 zone, which coincides with an important demand area and pivot support. Selling has been accompanied by rising volumes, suggesting active profit booking rather than a shallow consolidation.

On the weekly chart, the broader structure is still constructive, as prices remain well above the long-term breakout base near 7,500, but the index is undergoing a mean reversion after the sharp rally toward 10,000. Momentum indicators are cooling off from overbought territory, indicating scope for further consolidation.

A sustained hold above 8,000 is crucial to avoid a deeper retracement toward 7,500, while immediate resistance is placed at 8,800-9,000. Index majors like SBI, Bank of Baroda, PNB and Canara Bank have broken below key supports on the weekly scale indicating more weakness for the index in the near term.

Overall, the trend looks neutral to slightly weak in the short term, with a buy-on-dips approach preferable until a clearer reversal signal emerges.

Give us your top trading ideas for the week:

Bharti Airtel

View: Buy

Target: 1930

SL: 1798

Bharti Airtel is undergoing a healthy corrective phase after a strong secular uptrend, retracing from the recent peak near 2100. The stock is currently holding above the 1800 support zone, which aligns with a key pivot support and the prior breakout area, suggesting buyers are defending the higher base. Price structure indicates consolidation rather than trend reversal, with the broader uptrend still intact. Momentum indicators have cooled meaningfully from overbought levels, reflecting time and price correction, while volumes remain controlled, indicating the absence of aggressive distribution. A sustained move above 1900 would confirm short-term strength and could trigger a recovery toward 1930, where near-term resistance is placed. On the downside, a decisive break below 1798 would weaken the setup and increase the risk of a deeper retracement.

Karur Vysya Bank

View: Buy

Target: 307-315

SL: 282

Karur Vysya Bank is attempting a technical pullback after a sharp corrective move from the recent highs near 330. The stock has rebounded from the 285-290 demand zone, which coincides with a key pivot support and prior consolidation area, indicating buying interest at lower levels. Price action suggests the formation of a short-term higher low, pointing to a potential relief rally within a broader consolidation phase. Momentum indicators are cooling after the correction and appear to be stabilising, supporting the case for a near-term bounce rather than a trend reversal. Immediate resistance is placed near 307-315, where earlier supply and pivot resistance are clustered. A sustained move above this zone is needed to regain bullish momentum. On the downside, 282 remains a critical stop-loss, as a decisive break below this level would weaken the structure and reopen downside risk.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)