Chartist Talk: Nifty unlikely to slip below 25,000; build IT positions, says Rahul Ghose

Rahul Ghose is the Founder and CEO of Octanom Tech and Hedged

• Consider bullish position on Nifty near 25,100-25,000
• On the upside, bearish position can be considered at around 25,800-25,900
• Alternatively, one can play non-directional strategy in 25,000-25,800 range

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The Nifty 50 has a huge Put open interest built up at 25,000 levels, suggesting it may not breach this barrier atleast in February, said Rahul Ghose, the Founder and CEO of Octanom Tech and Hedged in an interview to Moneycontrol.

According to him, the index may come close to 25,000 and show a bounce back again. One can consider a bullish position on index near the levels of 25,100-25,000 & on the upside bearish position at around 25,800-25,900, he advised.

As far as individual stocks are concerned, he advises participating in the stocks which have fallen less than Nifty or shown strength, e.g. Bajaj Finance, Nykaa look good candidates. "If one has a long term view, one can look to build some positions in IT stocks."

Do the charts and the behaviour of technical indicators suggest that the Nifty may find it difficult to break out of the consolidation seen over the past 16 months?

Yes, Broader Nifty has been consolidating for a long time now, finding it difficult to cross the upper resistance level. It made multiple attempts to cross 26,300 but failed on all the three occasions. On the lower side the gap level created on US-India tarrif deal date is likely to provide a strong support which is around 25,100-25,000.

We also have a huge Put open interest (OI) built up at 25,000 levels, suggesting markets may not breach this barrier atleast in the month of February. On the upside fresh Call writers have emerged 25,800 range. At every 100 points there has been a huge increase in positions of Call writers suggesting Nifty may find it extremely difficult to breakout of this big consolidation.

The daily and weekly RSI oscillator levels also suggest a sideways trending market. The sense I get is markets may come close to 25,000 and show a bounce back again. We need a fresh strong trigger for Nifty to breakout, else this consolidation will continue.

What is your trading strategy for next week?

As far as Index is concerned, one can consider a bullish position on index near the levels of 25,100-25,000 & on the upside bearish position at around 25,800-25,900.

Alternatively, one can look to play a non-directional strategy in the range of 25,000-25,800. As far as individual stocks are concerned, participate in the stocks which have fallen less than Nifty or shown strength, e.g. Bajaj Finance, Nykaa look good candidates, if one has a long term view, one can look to build some positions in IT stocks.

Do you expect the Bank Nifty’s outperformance against the Nifty 50 to continue in the coming quarters?

Yes, technically Bank Nifty is stronger than Nifty & also trading above the key short term moving averages (20 & 50) unlike Nifty. It's in a tight weekly consolidation awaiting a breakout.

Since some of the bellwether banking stocks like SBI are extremely overbought on oscillators one can see a pull back in them. Consequently, the overall index may move sideways.

Are you genuinely bearish on the Nifty IT index, or do you expect it to find stability at current levels, which are similar to the April 2025 lows?

Nifty IT index is showing indications forming a potential Head & Shoulder on monthly charts, which will be confirmed if 30,000 level on Nifty IT index breaks. The charts are showing signs of further weakness. Every rally is likely to be sold off and it will be some time before the sector finds some stability.

Someone who has a 3+ year view can start accumulating at these levels, with more room to buy at lower levels. From a trading perspective, one can have an outlook of “sell on rallies”.

Do you see GE Power India and Max Financial Services maintaining their bullish structure in the coming weeks?

Yes, overall in GE power, the momentum is strong with decent volumes & it has broken out of a weekly symmetrical triangle. However, in a week, the stock has gone up almost 44 percent. One should exercise some restrain & look to enter only on a pull back near Rs 385-380 levels in the short to medium term.

Max Financial Services has a fresh ascending triangle breakout on monthly time frame with all-time high. Every pullback could be a potential entry point. The breakout measured target comes to around Rs 2,000 which is a likely possibility.

Based on the charts, do you think the worst is over for Gokaldas Exports?

Yes, looks likely. Technically, the stock is taking support at a monthly 20 EMA & consolidating in a broad flag pattern on monthly time frame. A break above Rs 955 will lead to further bullishness in the stock. Overall, the structure looks decent for entering on a pullback.