Bearish move or buying opportunity? Geojit’s Anand James on Nifty levels and top stocks to watch

The sell-off seen in the last 30 minutes on Friday has scared traders as to what could be in the offing on Monday morning. What do you think?
IMD’s below-normal monsoon forecast and uncertainty over US-Iran talks in the backdrop gave an ominous feel to the drop that unfolded towards Friday’s close. However, the steepness of the fall is apparently due to MSCI rebalancing, with futures and options segment appearing reluctant to match such move. Nevertheless the large red candle registered on Nifty’s chart needs to be acknowledged, and we will start the new week on a cautious note. That 23500 was defended, gives us reason to be optimistic, but slippage past the same, or inability to reclaim the 10 day SMA near 23750 will confirm bearishness calling for 22800.

Nifty has been seeing profit booking at higher levels in last few weeks. What does the rollover data indicate for the June series?
The rollover data for June series suggests a cautious to mildly negative undertone despite selective strength. Nifty’s rollover dropped to 69.98% in May, below the 3-month average of 73.05%, indicating reduced willingness to carry forward positions, likely reflecting profit booking at higher levels. Similarly, Bank Nifty rollover moderation points to some cooling in conviction within the heavyweight banking segment.

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Market breadth has weakened as well, with only 52% of stocks closing positive vs 91% in April, highlighting broader profit-taking pressure. While strong rollovers in select sectors like Oil & Gas, Metals, Power and Infra signal pockets of resilience, weakness in Pharma, Healthcare, and Transportation suggests lack of uniform participation.
Although long buildup was visible in Telecom, Capital Goods, and Pharma, the early trend in June appears cautious. Importantly, banks-despite prior long build-up-have started the June series on a weak footing, with heavyweights like SBI and HDFC Bank under pressure, which could weigh on Nifty due to their high index weight.
Nifty IT is showing signs of resilience even during sell-off. What are the charts indicating at?
The Nifty IT index is showing early signs of a trend reversal after a prolonged corrective phase. On the daily chart, the formation of an inverted head and shoulders pattern suggests a base-building process, with prices currently hovering near the neckline zone around the 29,500-29,600 region. A sustained move above this level could confirm a breakout and trigger momentum towards higher resistances.
On the higher timeframe, the weekly MACD is on the verge of a bullish crossover, indicating a potential shift from bearish to positive momentum. This aligns with improving price structure and supports the medium-term recovery thesis.

From a longer-term perspective, the monthly candlestick is forming a pin bar Doji, typically seen near inflection points, highlighting rejection of lower levels around the 27,000-28,000 zone and signaling demand absorption.

However, confirmation is key. Immediate support lies near 28,000, while a decisive breakout above the neckline could open upside towards 31,000-32,000. Failure to sustain above key resistance may keep the index range bound.

HFCL was among the top gainers of the week. Do you see signs of the momentum continuing in the week ahead?
Long wicked candle on Friday, with a close above upper bollinger band point to a mix of strong trending nature and emerging cautiousness. Oscillators appear reluctant, but are yet to confirm an impending collapse. With these in the backdrop, longs may be held on to, but ideally with a stop loss placed near 168.

Natco Pharma fell 14% on Friday after weak Q4 results. Do you see signs of bottom-fishing emerging in the coming week?
Yes. The single day red candle which has resulted in a break of structure, is likely to be followed by bottom fishing and a pull back rally that could extend 3-4%. However, we do not see enough signs to indicate that such pull back attempt could sustain.

Give us your top ideas of the week.

INDIANB (LTP: 833)
View: Buy
Target: 930
SL: 790

Indian Bank continues to maintain a structurally strong uptrend on the weekly chart, characterised by a series of higher highs and higher lows since early 2024. The recent profit booking since April seems to have found a support near 800 healthy consolidation after a sharp rally, with the stock holding firmly above the 780-750 support zone, which now acts as a strong demand base.

Despite the recent pullback from near 1000 levels, the correction appears time-wise rather than price-destructive, suggesting profit booking rather than trend reversal. The presence of a rising support trendline reinforces the bullish structure.

Momentum indicators are cooling off from overbought levels, which is constructive in a trending market. The RSI is stabilising near the mid-zone, providing room for a fresh upside leg, while MACD is approaching levels where a potential bullish crossover on lower drawdown could emerge.

SHYAMMETL (LTP: 973)
View: Buy
Target: 1080
SL: 930

Shyam Metalics is exhibiting a strong bullish breakout from a descending trendline on the weekly chart, indicating a potential resumption of the broader uptrend after a period of consolidation. Price has decisively moved above the 950-960 resistance zone, which also coincided with prior swing highs, adding conviction to the breakout.

The structure reflects higher lows formation, suggesting steady accumulation. Momentum indicators are turning supportive with RSI trending upward above the mid-zone, while MACD has delivered a bullish crossover with rising histogram, reinforcing improving momentum. Weekly Supertrend breakout adds to positivity. Volume expansion near the breakout area further validates buyer participation and strengthens the breakout reliability. Additionally, price holding above short-term supports near 930 indicates a favorable risk-reward setup.

As long as the stock sustains above the breakout zone, it is well-positioned to extend its upward move towards the 1080 target.