“So, today Nifty has fallen by more than 200 points from the day’s high. Today’s high was 26,041 and in the last week we saw a weak close on the weekly basis in the Nifty. There was a shooting star candlestick pattern on the weekly chart and last week’s high was 26,104. So, we see some consolidation in the market,” said Rajani.
He noted that profit booking dominated the session, with the rupee’s depreciation against the dollar adding to investor concerns.
“The other factor which is cautious is the movement of the rupee against the dollar. So, rupee has started depreciating against the dollar again, so that is a concern. Yesterday we saw 40 paisa depreciation in the rupee, so that has been a leading indicator in recent past and we should track it closely,” he added.
According to Rajani, Nifty faces a key resistance at 26,104—the previous week’s high—while 25,700 serves as an immediate support level. Until the index breaks out decisively from this range, he expects the market to remain sideways.
“So currently we are taking a view that unless we see a level above 26,104 which happens to be the previous week’s high, we should remain cautious and stock specific, sector specific because of the result season we may see some movement on the either side,” he said.Highlighting the resilience in select sectors, Rajani pointed out that metal and PSU bank stocks continue to outperform.“As we have been discussing metal stocks have been doing good, PSU banks have been doing good. So yes, we have to trade in the outperforming stocks and sectors. But as far as Nifty is concerned, there is a consolidation going on,” he explained.
The analyst believes any breakout beyond this consolidation range—either above 26,100 or below 25,700—will determine the next directional move for the market.
On trading ideas, Rajani expressed bullishness on metals and select NBFCs, identifying Tata Steel and IIFL as promising picks.
“We are bullish on the metals and metals today started in fact giving momentum. So aluminium stocks have already run up like Hindalco and Nalco. Today, within the metal space I can see some strength building in the steel stocks. So, Tata Steel is one of the stock which is today’s gainers in the Nifty also and looks like that the steel stocks are headed higher from here and the technical setup is quite convincing,” he noted.
Rajani suggested going long on Tata Steel around ₹180–₹180.5 with a trading stop loss at ₹177 and a short-term target of ₹187.
He also shared a positive view on IIFL from the NBFC space.
“IIFL is looking strong. It has broken out from the consolidation, trading around 515, 516. So, one can go long here. I would suggest trading stop loss at 505, on the upside I am expecting a target of 540 in next couple of sessions,” he said.
Rajani advises traders to stay cautious, focus on outperforming sectors, and maintain strict stop losses until Nifty decisively breaks out of its current consolidation phase.
