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“Bias is on the bearish side,” says Vinay Rajani from HDFC Securities.
Commenting on the current setup, Vinay Rajani noted that the index has been steadily losing critical support zones.
“Fifth consecutive session of a decline, and Nifty is gradually breaking all the support levels. The previous swing low was at 23,262, which was broken in intraday trade, and today’s low is 23,229. So definitely, bias is on the bearish side. Midcap, smallcap, and broader markets, which were performing very well last week, have started falling and are also witnessing some profit booking. So as of now, things are not going fine as far as the benchmark index is concerned.”
He further added that the broader technical structure remains weak across timeframes.
“Nifty is still trading below its 10-, 20-, 50-, 100-, and 200-day moving averages. That means across all time frames, we can say that it is in a clear-cut bearish trend. And unless we see any level above 23,800, the trend would remain on the bearish side only.”
Key support zone at 23,150; resistance at 23,800
Rajani highlighted an important gap zone that could act as immediate support in case of further downside.
“The only hope for traders is the gap support which was there. To be precise, on 8th April Nifty opened with a big gap of 700 points, and that gap range is at 23,155 to 23,700. So basically, 23,150 is the lower end of this particular gap which can act as support. This is the lower band of the gap and there is hope that it should find support.”
On the upside, he maintained that confirmation of strength would only come above a key level.
“So for Nifty, our view is bearish as of now, and unless we see 23,800 being taken out, we should remain cautious in the market.”
He added that while the overall trend remains weak, selective opportunities are still emerging.
“Yes, stock-specific and sector-specific some trading opportunities on the long side can also be monetised with keeping a stop loss.”
IT and metals show relative strength
Despite broad weakness, certain sectors continue to show resilience, particularly IT and metals, which are attempting to provide some support to the benchmark index.
Stock ideas: LTIMindtree long, Bank of India short
On specific stock opportunities, Rajani expressed a bullish view on IT, particularly LTIMindtree, citing technical strength after a prolonged consolidation.
“So right now, as I said, we are bullish on IT. No doubt we have seen a meaningful bounce and already 4–5% of the index has moved in the last two sessions, but still I see this strength continuing and some stocks are really oversold and have started participating now. LTIMindtree is looking very strong on the charts. After a long time, this stock has bounced back from long-term support, which is also a good sign. The sector is doing well. So, considering these rationales, I am considering LTIM for a long trade.”
He recommended a structured trade setup in the stock.
“So in June futures, one can go long in LTIMindtree around 4,300, stop loss can be kept at 4,180, and for traders, the target should remain at 4,500.”
On the short side, he flagged continued weakness in PSU banks.
“On the sell side, I am recommending one PSU bank which is continually showing weakness. Bank of India is looking weak on the chart. So Bank of India June futures can be shorted around 136.50, 139 should be the trading stop loss, and on the downside we are expecting a target of 131.”
Outlook
With the Nifty slipping below key moving averages and support zones being tested, the near-term outlook remains cautious. While selective sectoral trades are still visible, broader market direction continues to be dictated by weakness in benchmark indices and sustained profit booking in previously outperforming segments.
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https://economictimes.indiatimes.com/markets/expert-view/2-top-stock-recommendations-by-vinay-rajani/articleshow/131459763.cms
