Nifty Charts Indicate Ongoing Consolidation: Sudeep Shah Shares Strategies for Cohance, HEG, and Four Additional Stocks in F&O Talk

On Thursday, the Indian equity markets experienced a significant sell-off, primarily driven by heightened volatility that affected various sectors, including banks, auto, and consumer stocks. The Nifty 50 index closed down 180.10 points, or 0.74%, finishing at 23,997.55, while the Sensex reported a loss of 582.86 points, or 0.75%, settling at 76,913.50. The volatility index, India VIX, rose by 5.86% to close at 18.46, indicating increased investor apprehension given rising crude oil prices around $115 per barrel and weakening of the rupee. Analysts are now scrutinizing support and resistance levels for possible market direction in the upcoming week.

In a recent engagement with ETMarkets, Sudeep Shah, Vice President and Head of Technical & Derivatives Research at SBI Securities, shared insights on the current market landscape. Following an impressive rally in April, where the Nifty gained over 7%, the index has been consolidating in a narrow range between 24,335 and 23,798 in the last six trading sessions. This consolidation is attributed to multiple overlapping concerns, including crude prices and the sustainability of the US-Iran ceasefire. Shah posits that a breakout above the 24,350 resistance could initiate momentum towards 24,500 and 24,700, whereas a breakdown below 23,750 may lead to corrections toward 23,600 and 23,400.

The market’s present situation reflects a cautious demeanor, especially regarding the banking sector, which has experienced notable underperformance. Derivatives data suggests mixed positioning for both Nifty and Bank Nifty, with evidence of consolidation but lacking strong directional conviction. Shah noted that although smallcap stocks have maintained relative strength, outperforming their large and mid-cap counterparts, investors should remain vigilant. Focus should be directed toward fundamentally strong stocks within successful sectors, as the current technical indicators suggest ongoing support in the smallcap segment and potential opportunities within selected stocks, such as Cohance, Sapphire Foods, and HFCL, despite the risks associated with more volatile performers like HEG and MRPL.

Source: The Economic Times

(Expert Note: This report was prepared by the Wealthova team.)