Nifty: Technical Views: Nifty in overbought zone, but 26,250 possible

Both daily and weekly charts indicate a sharp positive trend for Nifty, with a potential target of 26,250 and immediate support at 25,600. However, caution is advised due to indicators like the FPIs’ long-short ratio reaching 75%, and the monthly RSI crossing 80, according to analysts. Stocks such as HDFC Bank, Kotak Bank, M&M, Maruti, Eicher Motors, L&T, Nestle India, United Spirits, Sobha, Lodha, JSW Steel, Blue Star, and Havells have formed bullish trends on charts.

NAGARAJ SHETTI, TECHNICAL ANALYST, HDFC SECURITIES

Where is Nifty headed this week?
After range-bound action with volatility in the last fi ve sessions, Nifty witnessed an excellent upmove on Friday. The short-term trend of Nifty is sharply positive. Having surged up in one session on Friday, there is a possibility of consolidation or a breather pattern in the short term, before moving up further. The next upside target is around 26,250 with an immediate support at 25,600.

What should an investor do?
One may continue with long positions and look to add more during consolidation. A sustainable move above 25,850-25,900 levels could open the next upside target of 26,200-26,300. It is advised to trail stop loss for higher targets. Any dips down to 25,650-25,600 could be a buying opportunity. Sectors for longs include auto, FMCG, realty, consumer durables and met als. Stocks with positive bias are M&M, Maruti, Eicher Motors, Nestle, United Spirits, Sobha, Lodha, JSW Steel, Blue Star and Havells.

RUCHIT JAIN, LEAD RESEARCH ANALYST, 5PAISA.COM

Where is Nifty headed this week?
Our markets continued the uptrend post the Fed event. Certain segments such as IT, mid-caps and small-caps witnessed some profi t booking. FIIs have continued trading with long positions in index futures, but the client section has net short positions which they may cover this expiry week. Immediate support for Nifty has shifted to 25,450 followed by 25,300. On the higher side, the index could rally towards 26,050 and then 26,270. Bank Nifty also surpassed the previous swing high resistance and has ended at a record level which is a positive sign. For Nifty Midcap100 index, 58,350 is the important support to watch.What should investors do?
Banking, auto, FMCG and realty have positive chart structures and hence, one can look for stock-specifi c buying opportunities from these sectors. Buy L&T with stop loss below ₹3,680 for the target of ₹4,000. Buy Godrej Properties with a stop loss below ₹2,900 for target of ₹3,150. Buy Maruti with stop loss at ₹12,000 for target of ₹3,200.

MEHUL KOTHARI, AVP TECHNICAL RESEARCH, ANAND RATHI SHARES & STOCK

Where is Nifty headed this week?
With the fresh breakout, the ongoing momentum could propel Nifty toward 26,000 or higher. However, we remain cautious on the long side. Several factors signal potential caution, including FIIs’ long-short ratio reaching 75%, negative divergence on the weekly scale of Nifty 50, and the monthly RSI crossing above 80. On the downside, immediate support is at 25,400, and any breach of this level could signal the end of the current bullish phase. Meanwhile, after two months of consolidation, Nifty Bank has reached a new alltime high above the 53,350 mark.

What should investors do?
Despite the ongoing rally, caution is advised due to high valuations and signs of overbought conditions. Focus on stock-specifi c opportunities. Keep an eye on key support levels like 25,400 for Nifty and 53,000 for Nifty Bank. If these levels are breached, it could signal a deeper correction. Currently, we are seeing breakouts in Nifty Bank, alongside key stocks like HDFC Bank and Kotak Mahindra Bank, which could drive the index further toward the 54,500 mark. However, the trend-defi ning support level is set at 53,000, and any breach of this level could result in a trend reversal. Certain pockets like defence, shipping, and railways are looking good for a relief rally.