Nifty in Consolidation Phase, faces Key Levels at 25,700-26,100: analyst Rajani
Mumbai – October 28, 2024 – The Nifty index is currently experiencing a consolidation phase, trading within a range of 25,700 to 26,100, according to analyst Vinay Rajani.The index fell over 200 points from its day’s high today, with a high of 26,041, following a weak close last week marked by a “shooting star” candlestick pattern at 26,104.
Rajani noted that profit booking and a weakening rupee are contributing to investor caution. “The other factor which is cautious is the movement of the rupee against the dollar. So, rupee has started depreciating against the dollar again, so that is a concern.Yesterday we saw 40 paisa depreciation in the rupee, so that has been a leading indicator in recent past and we should track it closely,” he saeid.
He identifies 26,104 - last week’s high – as a key resistance level for the Nifty, while 25,700 will act as immediate support. Rajani expects the market to remain largely sideways until the index breaks decisively above 26,104 or below 25,700. “Unless we see a level above 26,104…we should remain cautious and stock specific, sector specific because of the result season we may see some movement on the either side,” he explained.
Despite the overall consolidation, Rajani highlighted the outperformance of metal and PSU bank stocks. “As we have been discussing metal stocks have been doing good, PSU banks have been doing good. So yes, we have to trade in the outperforming stocks and sectors,” he stated.
rajani’s Top Picks:
The analyst expressed bullishness on the metals sector and select Non-Banking Financial Companies (NBFCs),specifically recommending Tata Steel and IIFL.
he suggests a long position on Tata Steel around ₹180-₹180.5, with a stop loss at ₹177 and a short-term target of ₹187, citing a “convincing” technical setup and strength building in steel stocks. “Tata Steel is one of the stock which is today’s gainers in the Nifty also and looks like that the steel stocks are headed higher from here,” he noted.
For IIFL,Rajani recommends a long position around ₹515-₹516,with a stop loss at ₹505 and a target of ₹540 within the next few sessions,as the stock has broken out from a consolidation phase.
Rajani advises traders to remain cautious, focus on outperforming sectors, and maintain strict stop losses until the Nifty establishes a clear directional trend.