Chartist Talks: Hedged's Rahul Ghose explains why he is betting on these 2 largecaps in this market correction

The Nifty has displayed resilience compared to global counterparts, but declaring a “tariff bottom” is premature. The weekly chart reveals a “same-high-same-low” formation, transitioning from a lower high-low structure, indicating a prolonged sideways range. On the monthly timeframe, the index precariously hovers around the 20-period moving average, with any breach potentially triggering fresh selling pressure.

Additionally, the daily chart shows Nifty trading below its 200-day moving average (DMA). RSI levels—43 (weekly), 40 (daily), and 53 (monthly)—further confirm the sideways momentum. While selling pressure has eased, uncertainty remains high. Nifty is likely to oscillate within the 21,700–22,900 range for now, with directional clarity emerging only upon a breakout.

Will Bank Nifty outperform other indices and hit record highs before Nifty?

Bank Nifty exhibits relative strength compared to Nifty. While Nifty trades significantly below its 200 DMA, Bank Nifty is hovering near it, signaling resilience. Private sector banks like ICICI Bank, HDFC Bank, and Kotak Mahindra Bank are leading this strength, with Kotak Mahindra Bank emerging as a standout performer recently. However, public sector heavyweights like SBI and PNB remain weaker, limiting broader participation. Although banking is relatively stronger, achieving new highs will require more inclusive sectoral momentum.

Which two stocks are on your radar for buying based on technical and F&O structures?

Asian Paints and Britannia Industries are my top picks in this market correction. Asian Paints benefits from robust consumer demand and falling crude oil prices. It is reacting positively from higher timeframe support levels, presenting an excellent reward-to-risk ratio.

Britannia Industries has formed a strong bullish candle near its 200 DMA on impressive volumes. Both stocks exhibit favourable technical setups and are positioned as potential outperformers in the current environment.

Have worst-case scenarios been priced into Nifty IT? Is there evidence of a double-bottom formation?

The Nifty IT sector has undergone significant corrections, possibly pricing in some worst-case scenarios. However, the charts do not yet confirm a double-bottom formation. The sector remains vulnerable to global economic uncertainties and tariff policies. While long-term growth prospects driven by AI adoption remain intact, deeper corrections could present better buying opportunities. For now, systematic investment plans (SIPs) appear to be the prudent approach.

Are FMCG stocks attractive post-RBI policy?

Yes, FMCG stocks have turned highly attractive following the RBI policy announcement. The sector’s defensive nature and consistent demand make it a reliable investment during uncertain times. Stocks like Britannia Industries and Nestle are well-positioned to capitalize on this trend. On weekly and monthly charts, the Nifty FMCG index displays strong green candles backed by healthy volumes. Additionally, tax relief measures announced in the budget have provided further impetus to consumer-driven sectors.

Are you bullish on InterGlobe Aviation? Do you foresee further downside in Tata Motors?

Both InterGlobe Aviation (IndiGo) and Tata Motors hold promise but require distinct approaches. IndiGo continues its bullish trajectory with no immediate resistance overhead; falling crude prices serve as a key catalyst for its upward momentum. Conversely, Tata Motors is in a pronounced downtrend across all timeframes but has corrected nearly 50% from its peak—a potential opportunity for long-term investors given its leadership in the EV segment. While IndiGo aligns with trend-following strategies for risk-averse investors, Tata Motors offers contrarian opportunities for those with higher risk tolerance.

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