Nifty@25,100? More dips to come first: A James
Benchmarks Nifty24,366.00-29.85FEATURED FUNDS★★★★★Motilal Oswal Midcap Fund Direct-Growth5Y Return23.43 % Invest NowEnter search text:HomeETPrimeMarketsMarket DataNewsIndustrySMEPoliticsWealthMFTechAICareersOpinionNRIPanacheThe Economic Times daily newspaper is available online now. Read Today's Paper Nifty outlook: Further dips possible before a move towards 25,100, says Anand JamesSECTIONSNifty outlook: Further dips possible before a move towards 25,100, says Anand JamesBy Nikhil Agarwal, ETMarkets.comLast Updated: Aug…
Nifty outlook: Further dips possible before a move towards 25,100, says Anand James
The current setup still appears more constructive than outright bearish in the case of BankNifty. The index is approaching a rising trendline support, while the narrowing trading range suggests volatility compression ahead of a potential breakout move. The key concern remains the lack of participation from heavyweight constituents such as HDFC Bank and SBI, which has limited upside momentum and prevented banking from reclaiming market leadership.
He said a break below 24,170 could weaken the near-term structure and expose the index to 23,575. On Bank Nifty, James sees the ongoing consolidation as a base-building phase, with a decisive breakout likely only beyond the 57,100–58,000 range. He also identified Realty and PSU Bank as sectors that could lead, while cautioning against near-term weakness in Auto and Energy stocks.
Edited excerpts from a chat:
Nifty fell about 1% in the week as it tested the 24,300–24,400 support cluster. On the weekly chart, is this still a routine higher-bottom formation, or are we seeing the first credible signs of trend deterioration?
Nifty has been on a consolidation mode ever since pushing above the upper bollinger band early this month. This appears like a time correction, having scaled over +1000 points in just a week, towards the end of July. The 20 dma, now in the 24300 vicinity appears to provide support, but with momentum lacking, we feel that there might be further dips before a leap to 24850-25100 unfolds. Alternatively, inability to restrain dips to 24170, could expose 23575.
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Bank Nifty remains trapped broadly between 57,100 and 58,000, with its major moving averages flattening. Is this consolidation constructive, or does the absence of banking leadership materially increase the probability of a breakdown?
The current setup still appears more constructive than outright bearish in the case of BankNifty. The index is approaching a rising trendline support, while the narrowing trading range suggests volatility compression ahead of a potential breakout move. The key concern remains the lack of participation from heavyweight constituents such as HDFC Bank and SBI, which has limited upside momentum and prevented banking from reclaiming market leadership. However, recent doji and reversal-type candles in HDFC Bank, ICICI Bank, Axis Bank and Kotak Mahindra Bank indicate early signs of a pullback attempt. Unless Bank Nifty decisively breaks below trendline support near 57,100, the current consolidation is best viewed as a base-building phase rather than a precursor to a major breakdown. BankNifty Option positioning remains range-bound, with the highest Call OI at 58,000 and significant additions at 57,500-58,000, reinforcing overhead resistance. On the Put side, strikes near 57,500-57,700 are being written suggesting support near current levels. The combination of fresh Call and Put writing points to continued consolidation, with a decisive move likely only on a breakout from the 57,100-58,000 range.
Based on weekly relative strength charts, which two sectors are positioned to lead next week, and which two should traders avoid?
Leaders: Nifty Realty Index is exhibiting early signs of a turnaround, with relative strength improving from 0.03 to 0.04 and holding steady in recent weeks, indicating improving market interest while Nifty PSU Bank Index has remained resilient with a stable RS profile in the 0.34-0.36 range, suggesting further improvement if momentum builds in the coming week.
Laggards: Nifty Auto Index, after a strong rally in recent months, is beginning to show signs of exhaustion as RS eased from 1.21 to 1.20, raising the possibility of near-term profit booking. On the other hand, Nifty Energy Index continues to underperform, with RS declining from 1.65 to 1.58 over the past few weeks, reflecting weakness relative to Nifty.
MCX shares jumped 10% amid positive news flow. Do you think the upmove is sustainable?
An evening star, which is a bearish reversal candle stick pattern has formed, pointing to hesitation, being near July peak. Oscillators are also easing. With these in the backdrop, we would recommend a fresh entry into the stock only on dips to 2880, with downside marker below 2800 or on direct rise above 3000.
