Oversold Nifty could see a short-term rebound: Analysts

The Sensex and Nifty extended their losing streak to a fifth week, the longest in 14 months, with Nifty sliding nearly 2% and slipping below key moving averages. Analysts said the indices have entered oversold territory, leaving scope for a short-term rebound.

TANMAY SHAH, RESEARCH HEAD, SIHL

Trading Strategy: Given the current oversold condition and the possibility of Nifty holding above the 22,950 support zone, traders can consider a Bull Put Spread for the September 29, 2026 expiry, by selling the 23,200 Put and buying the 22,950 Put. The strategy offers a favourable risk-reward profile while allowing traders to benefit from time decay if Nifty remains sideways or sustains above 23,200. The structure is suited to a cautiously bullish-to-neutral view for the month.

TOP STOCKS THIS WEEK

Kotak Mahindra Bank:

Buy | CMP: Rs 419 | Target: Rs 432–439 | Stop loss: Rs 408

The stock broke out above Rs 410, then retraced to retest the breakout zone. Support near the 20-day moving average indicates buying interest at lower levels.

LIC Housing Finance:
Buy | CMP: Rs 562.90 | Target: Rs 598–615 | Stop loss: Rs 539Strong delivery-based buying over the past two weeks has lifted the stock sharply from the Rs 480–490 support zone, reinforcing a positive price structure and sustained accumulation.

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SUDEEP SHAH, HEAD – TECHNICAL AND DERIVATIVES RESEARCH, SBI SECURITIES

Nifty Strategy: Nifty has slipped below key moving averages, with weak momentum, keeping bias tilted to the bears, though oversold conditions are emerging. A break below 23,000 could drag the index to 22,800– 22,500. On the upside, 23,600–23,650 is the key hurdle, with recovery signals only above 23,650. Nifty longs are advised only above 23,650, with a stop-loss at 23,450 and targets of 23,950– 24,100, anticipating short-covering.

TOP STOCKS THIS WEEK

BHEL:

Buy | CMP: Rs 431 | Target: Rs 447–455 | Stop loss: Rs 420

The stock maintains a strong price structure, trading above key moving averages across timeframes. Buying support on dips and relative strength against the broader market keep the setup positive.

PNB Housing Finance:

Buy | CMP: Rs 1,178 | Target: Rs 1,240–1,276 | Stop loss: Rs 1,130

The stock broke out above Rs 1,130 in early August. Subsequent dips towards Rs 1,130 attracted strong buying with rising volumes.

Read more: Inside NSE IPO journey: Why India’s largest exchange took 10 long years to reach Dalal Street

DHARMESH SHAH, HEAD TECHNICAL, ICICI DIRECT

Trading Strategy: As long as Nifty holds Friday’s panic low near 23,200, a mean-reversion move towards 24,000 remains possible. Nifty has failed to beat the prior day’s high for 13 straight sessions. Historically, this setup occurred 34 times, with 25 instances leading to double-digit average gains over the next 3–6 months. The index is also below its 200-day EMA, while the weekly Stochastic at around 17 is deep in oversold territory, signalling downside exhaustion.

Any decline towards 23,100–23,200 in Nifty Spot should be used as a buying opportunity for a target of 23,500. Immediate support is placed at 22,850.

TOP STOCKS THIS WEEK

Adani Ports:

Buy | CMP: Rs 1,765 | Target: Rs 1,876 | Stop loss: Rs 1,679

Buying demand has returned after the stock retested the 12-month rising channel breakout at the 200-day EMA, with the weekly RSI showing a bullish crossover that confirms the positive bias; recommended in the Rs 1,710–1,765 range

BHEL:

Buy | CMP: Rs 430.60 | Target: Rs 470 | Stop loss: Rs 402

After a 14-week consolidation above the 50-day EMA, the stock is shaping into a bullish pennant, with a breakout likely to accelerate momentum; recommended for buying in the Rs 420–430 range.