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Nifty broke its 6-day profitable streak on Friday however the market began exhibiting indicators of some weak spot on Thursday afternoon itself. Do you assume all-time document excessive appears to be like doable within the week forward?
Over the previous decade, Nifty50 has delivered unfavourable returns in the course of the Diwali week in 5 out of 10 situations. Curiously, in 80% of these instances, the index went on to say no by a mean of two% within the following month. If historical past had been to repeat itself, Nifty50 may doubtlessly drift in direction of the 25,400 mark within the close to time period, earlier than returning to the upside trajectory. Including to the cautious sentiment, banking shares, which represent round 20% of the Nifty50, seem susceptible and should contribute to the continued pullback.Nonetheless, Oil & Fuel shares, notably Reliance Industries, are exhibiting resilience and will assist restrict deeper corrections and even hasten the return to the upside trajectory sooner.
The Diwali rally appeared largely pushed by brief protecting. How a lot room stays for additional unwinding within the system?
The decline in OI over the past week of expiry, sometimes a interval of unwinding, was simply 9%, considerably decrease than the six-month common of 20%. This hints at additional room for unwinding within the coming week.
In the meantime, FIIs’ shortcovering of their index future shorts have picked up tempo. The lengthy brief ratio has pushed above 20, lengthy’s open curiosity has risen to 50k ranges, each occurring for the primary time since July 2025. Nonetheless, FIIs maintain a trifle extra shorts than these held in the course of the June-mid July interval, throughout which Nifty was within the 25000 neighborhood, compared to the 26000 neighborhood now. That FII’s brief protecting is unfolding even at such a better stage, factors to potential for continuation of the brief protecting.
IT was the shock gainer within the holiday-shortened week. What are the charts indicating at – revenue reserving or extra upside?
The Capturing Star sample fashioned on Thursday, adopted by a bearish large-bodied candle on Friday, is but to substantiate a breakdown. As a substitute, it might be interpreted as bearish hesitation, suggesting that whereas some additional pullback may happen early subsequent week, a decisive development reversal continues to be unsure.
On the weekly charts, the broader development stays constructive, with the MACD histogram printing one other inexperienced bar, reinforcing the potential for an upward transfer in direction of 37,600 within the close to time period.
From a derivatives perspective, round 70% of shares on Friday, and 60% on a week-on-week foundation, witnessed lengthy unwinding, indicating ongoing revenue reserving. Nonetheless, it is value noting that 20% of IT shares recorded an OI PCR beneath 0.5, hinting at a doable help build-up within the sector.
From a stock-specific angle, main IT names like TCS, Infosys, HCLTech, Wipro, Tech Mahindra, and LTIM might face additional revenue reserving within the brief time period. However, we anticipate that bulls may regroup quickly, doubtlessly driving the index larger towards the 37,600 mark.
SCI shares went up 22% within the final one week on the again of presidency’s Rs 70,000 maritime bundle announcement. How would you commerce the inventory going forward?
Whereas the Rs 270 neighborhood seems to be the primary pause level for the continued breakout transfer, we see potential for even bigger strides, ideally aiming for Rs 330-340. Recent entry can be difficult although, because the tightly wound stochastics may spark volatility, however a draw back marker close to Rs 260 may very well be utilized by aggressive merchants who would wish to enter instantly, for worry of lacking out.
Give us your prime concepts for the week.
POLICYBZR (CMP:1682)
View: Purchase
Goal: Rs 1760
SL: Rs 1644
The inventory has been below strain since September, persistently forming decrease lows. This week, nevertheless, it rebounded from the decrease trendline help close to 1633, indicating {that a} pullback could also be underway.
On the technical entrance, the MACD is nearing a bullish crossover on the every day chart, whereas the weekly MACD histogram exhibits indicators of exhaustion at decrease ranges, each suggesting a possible restoration try.
We anticipate the inventory may transfer in direction of 1730 and 1760 within the close to time period. To handle danger, lengthy positions must be protected with a stop-loss positioned beneath 1644.
PFOCUS (CMP:178)
View: Purchase
Goal: Rs 190
SL: Rs 168
The inventory has been buying and selling inside a rising development channel since July, and this week it rebounded from the trendline help close to 164. It has additionally damaged above the slim resistance zone round 172, fashioned throughout October, indicating short-term bullish momentum.
From a technical standpoint, the MACD has crossed above the sign line, and the 14-day RSI has moved above its transferring common, each of which reinforce the expectation of an uptrend. Primarily based on present momentum, we anticipate a possible transfer in direction of 190 and 200 within the close to time period.
To handle danger, lengthy positions could also be protected with a stop-loss positioned beneath 168.
