After two consecutive weeks of gains, Nifty appears to be losing steam, settling into a narrow consolidation phase that has market participants questioning the sustainability of the recent rally. With momentum indicators turning sluggish and oscillators failing to signal a strong directional move, investors are looking for clarity on whether the index can break out of its current range or if a pullback is imminent.
In this exclusive conversation, Anand James, Chief Market Strategist at Geojit Investments Limited, breaks down the key technical levels that will determine Nifty's near-term trajectory. From explaining why he doesn't expect a vertical rise despite Friday's late recovery to discussing Nifty Bank's struggle after record highs, James provides actionable insights for traders navigating the current market environment.
He also reveals his strategy for trading TCS ahead of earnings and identifies specific stocks positioned for potential breakouts in the week ahead.
Edited excerpts from a chat:
Nifty appeared to be consolidating within a narrow range during the week after two consecutive weekly upsides. What are the key levels to watch out for now?
A week-long downside found support in the 25300 vicinity, which is also where several pivots coincide, including the 38% fibo of the 20-30 June up move. That Friday’s late upswings managed to push Nifty beyond 25382, the 10-day SMA, is also a positive, bringing back the 26200-26500 trajectory back into picture. However, momentum is still dull, and oscillators’ signals also do not provide for a vertical rise. This leads us to believe that upswing attempts will face challenges at 25500-588-650-730 points, followed by a turn lower as the week progresses. Downsides, for now, are expected to be limited to 25300-24920.
Nifty Bank momentum also slowed down after hitting record highs. How would you go about trading the index now?
Despite profit booking after record highs, the index managed to reverse near the 50% Fibonacci retracement level (from June low to July high), forming a reversal candle resembling a hammer, suggesting an attempt to regain strength. The MACD, on an extremely short-term scale, crossed above the signal line on Friday, adding to the possibility of a pullback early next week. However, when compared to other sectoral indices, the Nifty Bank Index is in the weak quadrant, indicating both underperformance and declining momentum. This suggests the index may require stronger leadership to regain upward traction. Index heavyweights such as ICICI Bank, SBI, Axis Bank, and HDFC Bank may witness early buying interest, but signs of exhaustion at higher levels on weekly and monthly charts point to the potential for renewed selling pressure. This may drag the index toward the stronger support zone of 56,200–56,150.
Raymond shares were among the top gainers in the week amid positive news flow and the listing of real estate arm. Would you suggest profit booking at these levels?
That the stock turned lower from the July 2024 peak, and the evening star candlestick pattern formed therefrom, is suggestive towards an end to the uptrend. Nevertheless, being in the vicinity of the May 2025 peak of 703, a swing higher could be seen initially, but the favoured view expects strength only if a close above 784 is seen. Those waiting for such a breakout would do well to have a stop loss near 668.
Trent lost 12% on Friday following a downgrade. Do you see chances of the dip being bought in the week ahead?
A gapped-down opening on Friday, followed by extended slippage during the day underscores the strength of the bearish momentum. But the fact that we have now swung to 2 standard deviations from a five-month top in a single day, potentially provides conditions for a pullback in the coming week. Downside markers may be placed near 5111.
Give us your trading strategy for TCS ahead of its results announcement on 10th.
The Nifty IT index is above its 20 DMA, signaling relative strength in the broader IT sector. In comparison, TCS is currently trading below its 20-day moving average, pointing towards upside potential. But then, 50% of large cap stocks in the Nifty 500 universe are also trading below their respective 20 day SMA, suggesting TCS' position is not unique. Historically, TCS has shown a bullish bias in July, posting gains 70% of the time over the last 10 years. During those positive Julys, the average monthly return was 5.66%, with an overall 10-year average of 3.18%. Notably, in July 2024, TCS delivered a robust gain of 12.33%. Meanwhile, at 159.85, TCS’ straddles are priced very close to the highest point in the last 30 days, but much below the six month peak of 224. This uptick in volatility expectation is also reflected in Friday’s positioning where the largest additions were seen along strikes 12% away from current price on either side. Option traders having positioned themselves towards such extremes, IVs have also gone up setting windows for building OTM short strangles.
Which stocks would be on your radar in the week ahead?
TORNTPHARM (CMP: 3,368)
View: Buy
Target: 3,650
SL: 3,219
The stock broke above a pattern resembling an inverted Head & Shoulders on the weekly chart last week. Additionally, the recent bullish MACD crossover on the weekly timeframe, coupled with minor profit booking this week, has brought the stock back onto buyers’ radar. On the daily chart, a pin bar doji on Thursday followed by a strong green candle on Friday—after a three-day decline—further suggests that the stock is positioning itself for a larger move.
Reinforcing this bullish setup, the latest RRG analysis places the Pharma sector firmly in the “Strong” quadrant, confirming both outperformance and a strengthening trend.
We expect the stock to move towards 3,650 in the near term. A stop-loss should be placed below 3,219 to protect against downside risk.
GODREJIND (CMP: 1,165)
View: Buy
Target: 1,235
SL: 1,148
Following the recent pullback that began in mid-June, the stock formed a pin bar doji on Thursday, rebounding from the 100 DSMA. This was followed by an inverted pin bar doji on Friday, signaling a potential reversal attempt. Additionally, the MACD histogram is showing signs of exhaustion at lower levels, further supporting the expectation of a near-term recovery.
We anticipate the stock to move towards 1,235 in the coming week. All long positions should be protected with a stop-loss placed below 1,148 to manage downside risk.
In this exclusive conversation, Anand James, Chief Market Strategist at Geojit Investments Limited, breaks down the key technical levels that will determine Nifty's near-term trajectory. From explaining why he doesn't expect a vertical rise despite Friday's late recovery to discussing Nifty Bank's struggle after record highs, James provides actionable insights for traders navigating the current market environment.
He also reveals his strategy for trading TCS ahead of earnings and identifies specific stocks positioned for potential breakouts in the week ahead.
Edited excerpts from a chat:
Nifty appeared to be consolidating within a narrow range during the week after two consecutive weekly upsides. What are the key levels to watch out for now?
A week-long downside found support in the 25300 vicinity, which is also where several pivots coincide, including the 38% fibo of the 20-30 June up move. That Friday’s late upswings managed to push Nifty beyond 25382, the 10-day SMA, is also a positive, bringing back the 26200-26500 trajectory back into picture. However, momentum is still dull, and oscillators’ signals also do not provide for a vertical rise. This leads us to believe that upswing attempts will face challenges at 25500-588-650-730 points, followed by a turn lower as the week progresses. Downsides, for now, are expected to be limited to 25300-24920.
Nifty Bank momentum also slowed down after hitting record highs. How would you go about trading the index now?
Despite profit booking after record highs, the index managed to reverse near the 50% Fibonacci retracement level (from June low to July high), forming a reversal candle resembling a hammer, suggesting an attempt to regain strength. The MACD, on an extremely short-term scale, crossed above the signal line on Friday, adding to the possibility of a pullback early next week. However, when compared to other sectoral indices, the Nifty Bank Index is in the weak quadrant, indicating both underperformance and declining momentum. This suggests the index may require stronger leadership to regain upward traction. Index heavyweights such as ICICI Bank, SBI, Axis Bank, and HDFC Bank may witness early buying interest, but signs of exhaustion at higher levels on weekly and monthly charts point to the potential for renewed selling pressure. This may drag the index toward the stronger support zone of 56,200–56,150.
Raymond shares were among the top gainers in the week amid positive news flow and the listing of real estate arm. Would you suggest profit booking at these levels?
That the stock turned lower from the July 2024 peak, and the evening star candlestick pattern formed therefrom, is suggestive towards an end to the uptrend. Nevertheless, being in the vicinity of the May 2025 peak of 703, a swing higher could be seen initially, but the favoured view expects strength only if a close above 784 is seen. Those waiting for such a breakout would do well to have a stop loss near 668.
Trent lost 12% on Friday following a downgrade. Do you see chances of the dip being bought in the week ahead?
A gapped-down opening on Friday, followed by extended slippage during the day underscores the strength of the bearish momentum. But the fact that we have now swung to 2 standard deviations from a five-month top in a single day, potentially provides conditions for a pullback in the coming week. Downside markers may be placed near 5111.
Give us your trading strategy for TCS ahead of its results announcement on 10th.
The Nifty IT index is above its 20 DMA, signaling relative strength in the broader IT sector. In comparison, TCS is currently trading below its 20-day moving average, pointing towards upside potential. But then, 50% of large cap stocks in the Nifty 500 universe are also trading below their respective 20 day SMA, suggesting TCS' position is not unique. Historically, TCS has shown a bullish bias in July, posting gains 70% of the time over the last 10 years. During those positive Julys, the average monthly return was 5.66%, with an overall 10-year average of 3.18%. Notably, in July 2024, TCS delivered a robust gain of 12.33%. Meanwhile, at 159.85, TCS’ straddles are priced very close to the highest point in the last 30 days, but much below the six month peak of 224. This uptick in volatility expectation is also reflected in Friday’s positioning where the largest additions were seen along strikes 12% away from current price on either side. Option traders having positioned themselves towards such extremes, IVs have also gone up setting windows for building OTM short strangles.
Which stocks would be on your radar in the week ahead?
TORNTPHARM (CMP: 3,368)
View: Buy
Target: 3,650
SL: 3,219
The stock broke above a pattern resembling an inverted Head & Shoulders on the weekly chart last week. Additionally, the recent bullish MACD crossover on the weekly timeframe, coupled with minor profit booking this week, has brought the stock back onto buyers’ radar. On the daily chart, a pin bar doji on Thursday followed by a strong green candle on Friday—after a three-day decline—further suggests that the stock is positioning itself for a larger move.
Reinforcing this bullish setup, the latest RRG analysis places the Pharma sector firmly in the “Strong” quadrant, confirming both outperformance and a strengthening trend.
We expect the stock to move towards 3,650 in the near term. A stop-loss should be placed below 3,219 to protect against downside risk.
GODREJIND (CMP: 1,165)
View: Buy
Target: 1,235
SL: 1,148
Following the recent pullback that began in mid-June, the stock formed a pin bar doji on Thursday, rebounding from the 100 DSMA. This was followed by an inverted pin bar doji on Friday, signaling a potential reversal attempt. Additionally, the MACD histogram is showing signs of exhaustion at lower levels, further supporting the expectation of a near-term recovery.
We anticipate the stock to move towards 1,235 in the coming week. All long positions should be protected with a stop-loss placed below 1,148 to manage downside risk.
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