The benchmarks recorded positive closings in the last two sessions in a holiday-shortened week. The equity markets are closed today for the Good Friday holiday.
Fear index India VIX settled at 25.52 on the NSE in the last session, up 2.03%.
Analyst Sudeep Shah, Vice President and Head of Technical & Derivatives Research at SBI Securities, interacted with ETMarkets regarding the outlook for the Nifty and Bank Nifty, as well as an index strategy for the upcoming week. The following are edited excerpts from his chat:
Q: Nifty ended with a 0.5% cut in the holiday-shortened week. However, a strong Wednesday rally and a sharp Thursday reversal ensured back-to-back positive closings. Do you see some momentum now or was it just short covering?
The pattern continues to play out even in this truncated week. The Nifty has once again witnessed a 1–2 day pullback rally, only to be followed by a sharp gap-down opening, a sequence that has been consistently unfolding since the onset of the US–Iran war-led decline. Marking the sixth consecutive week of losses, the index continues to close in the red, reinforcing the prevailing weakness. But is this repetitive pattern quietly setting up a bigger move ahead?
On the weekly chart, the last three candles have formed with shadows on both ends, highlighting a lack of directional conviction. Despite the negative closing trend, neither bulls nor bears appear to have a decisive grip. When indecision peaks like this, it often precedes a decisive breakout.
Encouragingly, last week saw the index finding support near an upward-sloping trendline, drawn by connecting swing lows from January 2024, followed by a sharp rebound. Adding to this, a positive divergence is clearly visible on the daily RSI. While the index has been forming lower lows, the RSI has been marking higher lows, hinting that the weakness may not be as strong as it appears on the surface.That said, this divergence still awaits confirmation through price action.
The 22,900–23,000 zone remains a critical hurdle. A sustained move above 23,000 could trigger an extended pullback towards 23,300, followed by the 23,500 level. Conversely, immediate support lies in the 22,400–22,350 zone. A decisive breakdown below 22,350 would signal a resumption of the downtrend, opening the door for further downside towards 22,200 and potentially 22,000. This makes the 22,350 level a make-or-break zone for the market in the coming sessions.
Q: What are important levels for Bank Nifty and strategy to trade F&O?
The banking benchmark index, Bank Nifty, also closed in the red for the sixth consecutive week. However, the index marked a low at 49,954 and thereafter witnessed a sharp rebound, resulting in the formation of a Dragonfly Doji candlestick pattern. This formation signals strong buying interest at lower levels following the sharp correction witnessed over the last couple of weeks.
While the index continues to trade below its crucial moving averages, momentum indicators are painting a relatively constructive picture. The daily RSI has developed a positive divergence, suggesting that the downside momentum is gradually waning. Additionally, the MACD histogram is also indicating a slowdown in bearish momentum.
In terms of levels, the 52,000–52,200 zone is expected to act as an immediate hurdle for the index. A sustainable move above 52,200 could lead to an extension of the pullback rally towards 53,000, followed by 53,600 in the short term.
On the downside, the 50,900–50,700 zone will act as an important support area. A sustained break below 50,700 could resume the downward trend, with the index likely testing 50,000, followed by 49,400 in the near term.
Q: Earnings season begins next week with the announcement of TCS results. What should investors do with the stock and the overall IT pack?
Nifty IT has been undergoing a phase of consolidation for the last 24 trading sessions. During the same period, the frontline indices have witnessed a sharp sell-off, highlighting the relative outperformance of the IT index. The ratio chart of Nifty IT against Nifty is forming a sequence of higher tops and higher bottoms, reinforcing its relative strength. Additionally, Mansfield’s Relative Strength indicator has seen a strong rebound and is on the verge of crossing above the zero line, clearly indicating that Nifty IT is outperforming the frontline indices. The index has also moved above its 20-day EMA for the first time since February 2026. In view of these technical developments, we believe that Nifty IT is poised to continue its pullback rally in the short term.
Q: Will there be any specific sector/theme that will be in your radar this earnings season and any specific recommendation from you?
We believe that Nifty IT is poised to continue its pullback rally in the short term.
Meanwhile, Nifty CPSE and Nifty Metal indices witnessed a rebound from lower levels on Thursday and have also been outperforming the frontline indices over the past couple of trading sessions.
On the contrary, sectors such as Nifty Consumer Durables, Oil & Gas, Auto, Financial Services, FMCG, India Tourism, Media, Realty, and PSU Bank are likely to continue to underperform in the near term.
Q: RBI MPC meeting begins next week where the central bank is expected to hold interest rates in light of the ongoing war. What should be the strategy in rate-sensitive sectors like bank, realty and auto?
The Reserve Bank of India MPC meeting comes at a time of elevated uncertainty. The RBI may either hold rates or consider a hike, given rising crude prices and the spike in India’s 10-year bond yield to ~7.13%, levels last seen in May 2024. Higher yields often trigger equity outflows and signal tighter policy. Rate-sensitive sectors like banking, auto, and realty remain weak, trading below key moving averages with bearish momentum indicators. If a rate hike materialises, loan costs may rise, adding pressure. However, a status quo decision could trigger a short-term relief rally in these sectors.
Q: Fear index India VIX has spiked over 100% in a month. What should be the strategy to navigate this phase?
India VIX has surged over 100% in a month, breaking above the key 23–23.5 resistance zone, which previously acted as a strong barrier in August 2024. Elevated VIX typically creates discomfort for bulls, triggering panic and visible market volatility. Although volatility has cooled slightly in recent sessions, it remains elevated, with prior peaks seen around 31–32 in June 2024. Historically, such spikes are followed by a volatility crush, leading to premium cooling and market stability. In this phase, credit spread strategies like bear call spreads, bull put spreads, or iron condors are preferred to take advantage of the volatility crush as and when it happens, while debit spreads remain less favourable considering volatility is extremely elevated with little room for further upside.
Q: Ola, Latent View and Dmart were among top gainers this week, while Authum, Ashok Leyland and LG Electronics have been big losers. What should investors do with them?
Ola Electric Mobility has witnessed a sharp pullback of 26% over the last three days. Despite this rebound, the overall chart structure remains weak as the stock continues to be in a prolonged downtrend. Immediate resistance is placed around 31; a move above this level could extend the pullback. Failure to sustain above it may result in the stock trimming gains and moving lower.
Latent View Analytics saw a strong 19.5% pullback, supported by volumes on 2 April. However, it continues to trade below its 50, 100, and 200-day EMAs, while the MACD remains well below the zero line. Immediate resistance is seen in the 335–340 zone. A breakout above this range could extend the pullback, while failure may lead to renewed weakness.
Avenue Supermarts has given a consolidation breakout on the daily chart, supported by a healthy rise in volumes. The RSI is trending higher, indicating strong bullish momentum, while the MACD is above the zero line, reinforcing the positive bias. Additionally, the Nifty Consumption Index is placed in the leading quadrant of the Relative Rotation Graph (RRG), signalling strong sectoral momentum and strength. With this support, the stock is likely to extend its upmove.
Authum Investment & Infrastructure failed to sustain above its 100-day EMA and has drifted lower since. The RSI is declining and has slipped below 40, while the stock trades below key short and long-term moving averages. As long as it remains below 470, the trend is likely to stay bearish.
Ashok Leyland has corrected nearly 31% from its high of 214 recorded on 27 February. A rising ADX indicates a strengthening bearish trend, while the MACD continues to slope downward, reinforcing the negative bias. As long as the stock trades below 160, the trend is expected to remain bearish.
LG Electronics India has corrected around 18% from its high of 1,612 made on 11 March. The stock has now slipped below its prior swing low of 1,325 (21 January 2026). The RSI is in a falling mode, indicating bearish momentum. A sustained move below current levels could lead to further downside.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)