Foram Chheda, CMT, Technical Analyst and Founder of ChartAnalytics, noted that the Nifty 50 showed mild weakness on the weekly chart, hinting at a possible retest of the previous breakout zone around 25,400-25,500 before the next leg higher.
She is bullish on CSB Bank and Force Motors this week. "Strong accumulation patterns suggest underlying bullishness in CSB Bank," she said.
Foram feels the current pullback in Bank Nifty is a healthy technical consolidation, offering room for the index to take a breather before moving higher. The 57,300–57,500 zone should serve as a strong near-term support from where the next leg of the uptrend could resume, she said in an interview to Moneycontrol. Here are edited excerpts:
Do you expect the Nifty to extend its decline to around 25,500 before resuming a fresh leg of the upmove toward a new record high in November?
As we begin the new month, Nifty marked a strong monthly closing at 25,722.10. This has resulted in the formation of a cup-and-handle pattern, suggesting that a breakout above the previous highest closing of 26,100 could trigger a fresh bullish upmove.
Zooming into the weekly chart, however, Nifty displayed mild weakness, indicating that a retest of the previous breakout zone around 25,400–25,500 is possible before resuming its next upward leg.
Will November be dominated by the bulls or the bears, considering past market performance?
The Nifty defied Seasonality studies. Going by seasonality study of last 10 years, October has returned an average return of 0.89 percent. However, this year, Nifty has gained 4.5 percent.
So far as November is concerned, it’s difficult to draw a direct comparison with the past few years due to several evolving macro factors — including trade tariff concerns, consistent FII selling, and ongoing geopolitical tensions that may indirectly impact India. However, historical seasonality suggests that over the past 10 years, Nifty has gained an average of 1.9 percent in November.
That said, technically, Nifty remains well-poised despite its relative underperformance versus other major global indices. For the rally to gain further momentum, however, broader participation from mid-cap and small-cap stocks will be essential — something that has been lacking recently. We have a neutral to mildly bullish view for the equities ahead in November.
What are your top two buy ideas for the coming week?
The banking space continues to outperform, with PSU banks leading in terms of relative strength and performance over the past few weeks. However, select private banks are also looking attractive.
After a rally from Rs 345 to Rs 427 in the past month, the stock has entered a consolidation phase. Strong accumulation patterns suggest underlying bullishness. A move above Rs 413 could open room for an upside toward Rs 426, with a stop-loss at Rs399.
The stock posted a strong weekly and daily close with healthy volumes. However, sustained momentum is likely only above Rs 17,870, which could trigger an upside toward Rs 18,700. Until then, some consolidation may continue.
Do you think the PSU Bank Index is at the beginning of a new bull run following its recent breakout?
The Nifty PSU Bank Index has delivered stellar performance — rallying from the lows of 5,530 in March to 8,140, marking an impressive ~47 percent gain. The October monthly close at record highs confirms a strong uptrend.
Long term Investors can stay invested in this space. However, for short-term momentum investors, this is the time to stay invested, but also guard their profits vigilantly by trailing their stops effectively.
Are you bullish on Navin Fluorine International and Fineotex Chemical, both of which saw a strong rally in the past week?
The stock has broken out of an inverted head-and-shoulder pattern on the weekly chart at around Rs 5,120, opening the door for a potential move toward Rs 7,000 over the medium to long term. This breakout was backed by strong volume action, further validating the bullish setup. Investors looking to enter can consider adding near Rs 5,200 on retracements, while existing holders can continue to ride the trend.
The stock surged 16 percent last week following a breakout from a prolonged consolidation. The near-term upside may extend toward Rs 32–33, where resistance could emerge. The move was supported by volume expansion, though sustained high volumes will be key for continued bullish momentum. The levels mentions are as per Friday’s closing. Important to note here is that FCL has a split in the ratio of 10/1 and going forward, prices would reflect this change.
Do you still expect the Bank Nifty rally to continue despite short-term weakness?
Yes, the Bank Nifty continues to show relative strength versus the Nifty, largely driven by PSU bank performance. Having closed at an all-time high, the long-term trend remains decisively bullish.
The current pullback is a healthy technical consolidation, offering room for the index to take a breather before moving higher. The 57,300–57,500 zone should serve as a strong near-term support from where the next leg of the uptrend could resume.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
