According to him, the Nifty has breached crucial support zones, specifically the 61% retracement level of the recent rally near 24,800. This breakdown has pushed the index below both its 20-day and 50-day moving averages. Even though the put-call ratio stands at an oversold level of 0.63, the index has shown no sign of recovery. Adding to the pressure, India VIX climbed to 11.5, reflecting heightened volatility. Sectoral indices that were earlier in an uptrend have also witnessed profit booking.
“Most of the sector indices which were in uptrend have attracted profit booking because of this uncertainty. So, every week if these kind of news flow comes from the US, the market would not be able to attract any sustained buying action and trend is likely to exhibit further on the weaker side,” he said.
A break below 24,500, he warned, could trigger liquidation and drag the index towards 24,350. Conversely, if a pullback emerges, 24,800 may act as the first supply zone, with scope for short-covering if the level is surpassed.
On Bank Nifty, Palviya highlighted that the index has decisively broken its 55,000 support and is now trading closer to 54,500. Sustained trade below this level could extend the decline towards 54,000. For the coming week, he expects Bank Nifty to trade within the 54,000–54,800 range.
Turning to sectors, he pointed out that IT stocks are under significant pressure. Despite broader market rallies earlier, Nifty IT failed to display bullish momentum. The index has now fallen below 34,000, a critical support on weekly charts, suggesting further downside. The recent H-1B visa-related developments have triggered unwinding of long positions in both largecap and midcap IT names. “Largecap IT stocks are still under pressure. There is no recovery. Most of the stocks have broken their previous swing low also, so which is also showing weakness on the near-term short-term structure,” he said.With the structure still negative, Palviya foresees more weakness, with 33,250 as the next downside level. He advised investors to avoid the IT space for now, as sectors already showing weakness typically recover last in volatile markets.
On stock-specific recommendations, Palviya maintained a bullish stance on Ashok Leyland. The stock has sustained its breakout levels despite market volatility and could advance towards ₹150–152 in the near term, with ₹136 as stop loss. On the short side, he recommended Biocon, which has broken major support zones and slipped below all near-term moving averages. He sees potential downside towards ₹326, advising a stop loss at ₹346.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
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