The stock market is poised to open lower on Monday, reflecting a cautious mood among investors after a strong rally last week. Both the Sensex and Nifty are expected to start the week quietly as traders look for fresh triggers following recent gains.
On Friday, both benchmark indices closed in the red as traders booked profits after the Nifty50 surged 4.2% last week. Foreign portfolio investors continued their buying streak, investing around Rs 15,925 crore, marking their fifth consecutive week of purchases.
From a technical perspective, experts see ongoing positive momentum but advise caution and close monitoring of key levels. Aditya Gaggar, Director at Progressive Shares, pointed out a “rounding bottom breakout” on the weekly chart of the Nifty, signaling strong bullish momentum. He highlighted resistance at 25,200 and support at 24,930 for the Nifty, while BankNifty is forming a Bullish Flag and Pole pattern, with resistance near 55,580 and support at 54,900.
Several sectors are showing promising chart patterns:
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Auto: Stocks like Bajaj Auto and Exide Industries display bullish patterns such as inverted head and shoulders and falling channel breakouts.
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Energy: After months of sideways movement, this sector is breaking out strongly with CG Power, JSW Energy, and SJVN leading the charge.
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Metal: Reversing previous downtrends, Jindal Steel and SAIL have seen symmetrical triangle breakouts.
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Pharma: Expected to rally following an inverted head and shoulders breakout.
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Realty: Showing range breakouts with stocks like AnantRaj and DLF performing well.
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Railways: Stocks like HBL Engineering, IRFC, Jupiter Wagon, Railtel, RVNL, Texmaco Rail, and Titagarh gained last week, with many showing bullish breakouts—ideal for a buy-on-dips approach.
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Defence: After a sharp rally, profit booking is advised due to stretched valuations despite promising long-term prospects.
Dr. VK Vijayakumar from Geojit Investments noted a puzzling trend: despite Rs 14,018 crore in institutional buying on the last trading day, the market declined. This suggests foreign institutional investors may be increasing short positions in derivatives, signaling more volatility ahead.
He also warned investors to be cautious with defence stocks, which have seen a steep rally but are now trading at high valuations, making some profit booking prudent.
Overall, the market outlook favors a “buy on dips” strategy, but investors should stay alert to potential volatility and sector-specific risks.
