Chartist Talk | Nifty may be rangebound in Budget week; Paytm rebound likely, upside in HCL Tech and TechM: Milan Vaishnav

Milan Vaishnav is the Founder of Gemstone Equity Research & Advisory Services

• Nifty may see minor downside but may not see major drawdowns
• Expect recovery in Paytm as stock has limited downside
• See some technical rebound in Swiggy
• Expect HCL Technologies and Tech Mahindra to move meaningfully higher from current levels

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According to Milan Vaishnav, MSTA, Founder of Gemstone Equity Research & Advisory Services, the Nifty may see minor downside but may not see major drawdowns. "We may stay in a broad range for some more time while maintaining the 24,500-24,750 zone as support," he said in an interview to Moneycontrol.

He expects recovery in Paytm as the stock has now limited downside, and sees some technical rebound in Swiggy if the major double bottom support near Rs 296 is defended.

Both HCL Technologies and Tech Mahindra are trading above key moving averages on all time frame charts. He expects both of them to move meaningfully higher from current levels.

What do you make of the momentum indicators? Are you convinced that the oversold signals point to an end to the current selling phase?

It would not be a good idea to look at overall technicals in isolation. On the daily front, on one hand, Nifty has violated the 200-DMA (25,412), and it has also oversold. On the higher timeframe charts, the Nifty has some more room on the downside till the 50-week MA, which is positioned at 24,758.

We are also approaching the Union Budget, which is one of the major events that the markets react to. The Fed Interest rate decision is also lined up.

Therefore, keeping all things in view, the Nifty may see minor downside but may not see major drawdowns. In the same breadth, linear moves may continue to elude us, and we may stay in a broad range for some more time while maintaining the 24,500-24,750 zone as support.

So, key would be to stay highly selective, not short the markets too much, and stay invested in relatively stronger pockets.

If so, does that mean the market (Nifty) is closer to a bottom, even though predicting market tops or bottoms is generally difficult?

I will not say that predicting market tops or bottoms is generally difficult. However, as a professional, one must also understand that it would be amateurish to think that one can buy at the lowest price and sell at the highest point. One can never catch the last cent.

Coming to the point, so long as the 24,500-24,750 zone is defended, the primary uptrend will stay defended. Only if this zone is violated can we expect some serious reversal.

Presently, it is all about digesting the primary uptrends rather than any reversal that we should be talking about.

Do you see a high probability of the Bank Nifty breaking below 58,000 next week and testing its November 2025 low?

The 58,000 is less than 500 points away from Friday's close. This may or may not get violated and this would not hold any technical significance. The primary uptrend stays protected so long as the 50-week MA is defended, which is positioned at 55,467.

What are your top two bets for the coming week?

My focus would continue to be on Relative Strength; the presence of relative strength would be a must in the present technical setup.

My top stock picks would be Bharat Electronics (BEL) and Lupin.

BEL has been a strong relative outperformer over the recent months. On higher timeframe charts, it has formed an ascending triangle. It is likely to get resolved while moving higher from current levels.

Lupin has also kept its primary uptrend intact. It is undergoing consolidation and is expected to move higher meaningfully from here while maintaining its relative strength against the broader markets.

Do you expect a bounce back in the midcap and small-cap indices soon, or are they likely to remain under pressure for the next couple of weeks?

I expect Midcaps to outperform small caps. While the Nifty Small Cap Index is evidently weak from a technical lens, the Nifty MidCap 100 Index has just resisted its multi-month resistance and is consolidating rather than showing any retracement. The relative strength (RS) against the broader Nifty 500 is also showing initial signs of improvement.

Do you see further downside in Paytm and Swiggy even after their recent sharp decline?

Paytm and Swiggy cannot be seen in the same manner. Paytm has reacted to negative news flow, but the primary uptrend remains absolutely intact. I expect recovery here as the stock has now limited downside.

On the other hand, Swiggy is technically weak and is approaching its major double bottom support near Rs 296. We need to see if that is defended. If yes, then we may see some technical rebound there as well.

Do you expect more upside in HCL Technologies and Tech Mahindra?

IT has been one of the most resilient spaces. Even if the absolute returns have stayed muted, it has demonstrated strong relative strength against the broader markets. Both HCL Technologies and Tech Mahindra are trading above key moving averages on all time frame charts. I expect both of them to move meaningfully higher from current levels.