After Nifty ended 2.5% lower last week by falling non-stop for 5 days, how bearish are the charts?
Steep falls that occur within a short time frame usually have a tendency to reverse once RSI hits 40. Incidentally Nifty’s RSI is near 38. Further, the upswing in RIL which alone contributed to nearly 25% of the index’s down move in the last week gives additional reason to consider possibilities of a recovery move. Alternatively, inability to close above 25776 during the week would have to be taken as a sign that Nifty is coming off a sideways trading range that has been on since November 2025, prompting us to consider possibilities of extended and long drawn decline, with 200 day SMA positioned deep near 25000 now.
RIL was the biggest drag on the index amid news flow around Russian crude oil import and US raid on Venezuela. How would you trade the stock on Monday?
Having retraced 62% of the Oct 2025 to Jan 2026 upmove, we are inclined to believe there might be a respite to the persistent selling seen in the last week or so. Such a swing higher could aim for 1490-1520. Else, if 1460 does not hold, look for 1420-1370.
India VIX also jumped sharply by around 16% in the week. Help us read the signal that the fear gauge is giving for traders?
The sharp jump in VIX was not unexpected, given the fact that it has been around record for a while now. Despite the rise, VIX is still under 11, and yet to signal that traders have become uncomfortable. We are looking for a stabilisation, at least briefly, with VIX having tested its 50 day SMA.
BHEL shares ended the week around 9% lower. On Friday, the stock did make some attempt to recover losses made on Thursday. Do you expect bounce back in the week ahead?
The collapse being a single day event followed by an inside bar, we are encouraged to bet on upswings in the week ahead. However, given that the stock pierced the 50 day SMA for the first time since mid September and closed below it last week, it will be prudent to look for a pull back above 280, as a confirmation.Monday’s session would have TCS releasing its Q3 numbers. How would you trade the stock on D-Day?
Looking at historical trends, TCS has shown a fairly balanced reaction on earnings day over the past decade, with positive moves averaging around 2%. Interestingly, in the last five years, the bias has been more on the upside, and these gains were often preceded by similar momentum in the prior week. Post-earnings performance has also been encouraging, with the stock delivering an average return of about 3% in the week following results.
Derivative signals continue to indicate a bullish bias. The option chain shows fresh long positions in call strikes from 3,180 up to 3,400, coupled with short covering in in-the-money calls between 3,120 and 3,160. On the put side, strikes in the 3,120–3,300 band have seen either new short additions or unwinding of long positions, pointing to weakening bearish sentiment. What stands out this time is the absence of the typical pre-earnings IV rush with OTM call IVs hovering near 20, while ATM call IV around 17, well below the usual average of 25 and near the lower end of the historical range for similar periods over the past five years. This suggests that the post-results IV crush may have minimal impact on premiums, allowing any upside momentum to sustain beyond the announcement.
Combining historical patterns with derivative cues, the setup suggests that TCS could see a positive reaction on earnings day and potentially extend gains by around 3% in the subsequent week.
Give us your top ideas for the week.
RALLIS (CMP: 252)
View: Buy
Target: 272
SL: 243
The stock has been in a corrective phase since the start of the new year and appears to have formed an inverted hammer on the daily chart. Additionally, the RSI is hovering near the oversold zone, indicating the potential for a rebound soon. We expect the stock to move towards 272 in the near term. All long positions should be safeguarded with a stop-loss placed below 243.
ABDL (CMP: 502)
View: Buy
Target: 544-565
SL: 585
The stock has been declining since November and witnessed a sharper fall after breaking the horizontal support at 599. The downtrend appears to be losing momentum around the 500–505 zone. With the RSI deeply in the oversold territory, we anticipate a rebound in the near term—initially towards 544, and subsequently towards 565. All long positions should be protected with a stop-loss placed below 485.
