F&O Talk: 22,600 is a key Nifty support; Sudeep Shah discusses PB Fintech, Infosys, TCS strategy ahead of Q2
Analyst Sudeep Shah, Vice President and Head of Technical & Derivatives Research at SBI Securities, interacted with ETMarkets regarding the outlook for the Nifty, options data, and an index strategy for the upcoming week. The following are the edited excerpts from his chat
The Indian stock market has recently endured a record-breaking eight-week decline, a streak that outpaces both the 2020 Covid-19 crash and the 2008 global financial crisis. Analyst Sudeep Shah, Head of Technical & Derivatives Research at SBI Securities, shared his insights on the market's outlook for the Nifty, options data, and a weekly trading strategy. Here are the key points from his conversation:
1. Nifty's prolonged losing streak is extremely rare, with only six instances in the past 25 years. Historically, the end of these losing streaks has been followed by significant recoveries, with average returns of 11% in one month, 12% in three months, 14% in six months, and 39% in twelve months.
2. The current market conditions bear similarities to 2008, with elevated crude prices, Strait of Hormuz disruptions, rising yields, and foreign institutional investor outflows. However, the current decline is less severe than in 2008 and 2020. A decisive break below the 22,600-22,400 zone could accelerate the downward trend.
3. Nifty's support levels for the coming week are expected to be 22,150-22,100, with 22,550-22,600 acting as an immediate hurdle. FII positioning has intensified, with outflows reaching Rs 43,687 crore in six trading sessions. A strong US dollar, high DXY, and US bond yields above 5% could continue to deter foreign investors.
4. IT stocks show signs of recovery, but their broader structure remains weak. Nifty IT remains below key moving averages, with rising ADX indicating strengthening bearish momentum. Immediate resistance is at 28,800-28,850, while the key support is 27,650-27,600.
5. PB Fintech has declined nearly 48% in six sessions, with a bearish bias likely to persist below Rs 1,150-1,200. Bajaj Auto has lost 7.62% and broken below its 200-day EMA, indicating strong bearish momentum. Infosys has bounced from the Rs 985-980 support, while TCS remains below key moving averages with strengthening bearish momentum.
Written by urgent.news from The Economic Times - Top News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
