Nifty may be in accumulation phase, says Anand James; Ather, Nazara top bets

After slipping around 1% in August and failing to reclaim its 200-day moving average, Nifty may be undergoing accumulation rather than entering a deeper correction, as long as the crucial 24,000 support holds, according to Anand James, Chief Market Strategist at Geojit Investments.

James sees a breakout above 24,500 opening the door to 24,900–25,100 and eventually 25,500, while a breach of 24,000 could drag the index towards 23,700. For the week ahead, he has picked Ather Energy and Nazara Technologies as his top buy ideas. Edited excerpts from a chat:

Nifty has fallen around 1% in August and retreated from its early-month high of 24,774. Does the chart indicate routine consolidation, accumulation or the beginning of a deeper correction?

After a clean breakdown below the 200-day SMA in late February, Nifty took multiple months to get back to and retest this key long-term moving average. The attempt in early August was unsuccessful, but after a nearly 3% pullback from the 200-day SMA, the downside stalled. We prefer to mark this as an accumulation phase unless a breakdown below 24,000 unfolds.

Nifty has repeatedly struggled to sustain recoveries despite receiving support near 24,000. What are the decisive breakout and breakdown levels that could determine its September trajectory?

Nifty remains stuck in a broad consolidation range, with buying interest emerging near 24,000 but lacking the strength to sustain a meaningful recovery. The daily chart shows the index holding above a rising trendline support around 24,000-24,050, while repeated failures near 24,450-24,500 highlight strong overhead resistance.
A decisive breakout above 24,500 would signal renewed bullish momentum and could pave the way for an advance towards 24,900-25,100, followed by 25,500. However, momentum indicators remain cautious, with the RSI hovering near the neutral zone and the MACD staying in negative territory. On the downside, 24,000 remains a critical support level. A sustained break below this zone and the rising trendline would indicate a weakening market structure, potentially triggering a decline towards 23,700, with further downside risk extending to 23,400-23,200.Therefore, 24,500 on the upside and 24,000 on the downside are the key levels that could determine Nifty’s directional bias and trajectory in September.

What do rollover data, open-interest shifts, implied volatility and the put-call ratio after monthly expiry indicate about positioning in the September series?

The weekly options data for the September series suggests a cautiously positive undertone, though traders remain wary of strong resistance levels ahead.

The key takeaway is the sharp build-up in put open interest at the 24,000, 24,050 and 24,100 strikes. The 24,100 Put holds the highest open interest, followed by the 24,000 Put, highlighting these levels as an important support zone. Notably, the rise in both put open interest and premiums points to fresh put accumulation and hedging activity, reflecting caution among participants rather than outright bullishness.

On the call side, the largest open interest is concentrated at the 24,200, 24,300 and 24,500 strikes. Fresh call additions across these strikes indicate that traders expect rallies to face resistance unless Nifty stages a decisive breakout.

Implied volatility has firmed up after expiry, suggesting expectations of higher market swings in the new series. The put-call open interest structure shows strong support around 24,000–24,100 and resistance in the 24,200–24,500 zone.

Overall, the September series begins with positioning suggesting a likely range between 24,000 and 24,300 in the near term. A decisive move above 24,300–24,500 could trigger short covering, paving the way for a rally towards 24,900–25,100. Conversely, a break below 24,000 would weaken the bullish setup and could invite fresh downside pressure towards 23,800–23,700 levels, where traders have added shorts in puts.

Welspun Corp and Ather Energy were among the biggest winners in August. What are the odds of the uptrend continuing?

Both are poised for further upside, but volume oscillators suggest that Ather has momentum in its favour at the moment, while Welspun needs a period of consolidation to mature before the next breakout unfolds.

Give us your top ideas of the week

ATHERNERG (LTP: 1,616)

View: Buy

Target: 1,700

SL: 1,560

Ather Energy continues to exhibit a strong bullish structure, maintaining a steady uptrend since March. The stock has recently witnessed a break of structure on the daily chart, indicating a resumption of upward momentum following a brief consolidation phase. Friday’s strong bullish Marubozu candle reflects aggressive buying interest and reinforces the positive price action.

Momentum indicators are also turning supportive. The MACD is on the verge of a bullish signal crossover, which could further strengthen the ongoing upmove. Meanwhile, the RSI remains elevated around 70, highlighting strong momentum and sustained demand. Despite the sharp rise, the stock has managed to maintain its higher-high and higher-low formation, suggesting that the prevailing trend remains intact.

As long as ATHERNERG sustains above 1,560, the bullish setup is likely to remain valid. The recent breakout and improving momentum indicators support the possibility of an advance towards 1,700 in the near term.

NAZARA (LTP: 374)

View: Buy

Target: 405

SL: 364

Nazara Technologies continues to maintain a positive trend after being in a sustained uptrend since March. The stock witnessed a fresh break of structure on Friday after being in a narrow range for most of this month, indicating a continuation of the prevailing bullish momentum and signalling the potential for further upside. The move is backed by a notable multi-week volume breakout, highlighting strong market participation and adding credibility to the breakout.

Momentum indicators are also turning supportive. The daily MACD has delivered a bullish signal crossover, suggesting strengthening momentum after a period of consolidation. Additionally, the RSI has moved above its moving average, reflecting improving buying strength and a positive shift in sentiment. The stock is currently trading above key support levels and sustaining its higher-high, higher-low structure.

As long as NAZARA holds above 364, the bullish setup remains intact. The combination of a structural breakout, improving momentum indicators and strong volume participation favours a move towards 405 in the near term.