James believes derivatives positioning and options data suggest traders are shifting their bullish expectations higher, with the market attempting to establish a new support base around 24,400-24,500. A decisive move above 24,800, he says, could pave the way for the benchmark index to extend its rally towards the 25,000 mark, provided banking stocks also join the advance.
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The Nifty has rebounded after a five-session fall, but is this a genuine trend reversal or merely a short-covering rally?
An upmove like this that has travelled all the way from the lower bollinger band to the vicinity of the upper bollinger band, cannot be labelled as just short covering rally, especially with all of these days seeing higher highs and higher lows. That said, being in the vicinity of the upper bollinger band as well as the peaks of April, May and July is sure to challenge the ongoing upside and trigger a mean reversion move. However, we feel that the base has shifted to 24100 region where the 20 and 10 day SMS converge, and this can be used as a downside marker, during attempts to re enter the uptrend on dips.
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As the August derivatives series begins with the Nifty near the crucial 24,400–24,600 resistance zone, what do rollover data, futures positioning and the options chain indicate about the likely trading range and which level could trigger a decisive breakout or breakdown?
The August series option positioning and futures short covering in the initial days of the new series suggests that market participants are gradually shifting their bullish expectations higher. While the highest Put OI remains at 24,000, the most aggressive fresh put writing has emerged at near OTM strikes like 24,400, 24,450 and slightly far OTM strikes like 24,750 and 24,850, indicating that traders are increasingly comfortable defending higher levels rather than relying on 24,000 as the primary support.
This upward shift of the put-writing base is a strong sign that the market is attempting to establish a new floor around 24,400-24,500. Simultaneously, significant call short covering is visible from 24,000 to 24,300, as call OI has declined despite rising premiums, suggesting that earlier resistance levels are weakening. On the other hand, fresh call addition has shifted higher, with the largest addition seen at 24,800 CE, effectively making it the next key level on the upside. Together, these trends point to the fact that traders expect a higher trading range of 24,400-24,800, with 24,800 acting as the decisive breakout trigger.
Private banks led last week’s correction, but Bank Nifty has not consistently led this week’s recovery. Can the Nifty break above 24,500-24,600 without stronger banking participation, and is Bank Nifty forming a base or merely a lower high?
Private banks led last week’s correction, but yet banking couldn’t meaningfully participate in Nifty’s recovery. From a technical perspective, Bank Nifty is attempting to form a base after bouncing from the rising wedge support near 56,000, though momentum remains subdued and the index is yet to confirm a higher high. The divergence is largely due to uneven participation within the banking pack. While HDFC Bank and SBI have provided support, ICICI Bank and Axis Bank have underperformed, limiting index gains. Derivative positioning also reflects this indecision, with roughly half of banking futures witnessing long build-up and the remainder seeing fresh shorts on a week-on-week basis. However, if laggards such as ICICI Bank and Axis Bank begin to catch up alongside HDFC Bank and SBI, Bank Nifty could move toward the wedge resistance around 59,300. Such a move would provide the leadership needed for Nifty to extend its rally toward the 24,800-25,000 zone.
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Midcap and smallcap indices bounced at the beginning of the week but lost momentum as the week progressed. Do their weekly charts indicate bottom formation, or is the relative strength of broader markets continuing to deteriorate against the Nifty 50?
Despite losing momentum during the week, the broader market structure does not yet suggest deterioration in relative strength. Both the Nifty Midcap 100 and Nifty Smallcap 100 continue to trade above key support zones and maintain a sequence of higher highs and higher lows. Smallcaps are testing a major long-term trendline resistance near 19,500, while midcaps are consolidating just below 14,800-14,900 after a strong recovery. The slowdown appears more like consolidation after sharp gains rather than a fresh downtrend. While relative performance versus the Nifty 50 has paused, both indices remain in potential base-building phases, with breakouts above 19,500 for Nifty Smallcap100 index and 14,900 Nifty Midcap100 index likely signalling renewed broader market leadership.
Bajaj Finance was the star performer in Friday’s session. How strong are the charts looking like for the week ahead?
Bajaj Finance has registered a very tempting breakout launching it to a new record peak, supported by strong volumes, and a close not far from the day’s peak. This also marks the end of an extended period of consolidation phase that has been on since October 2025, allowing a cup handle formation which now appears to have fully matured. While this sets up ideal conditions for large upmoves, with the first leg of upsides aiming 1356, we will keep the downside marker near 1074, should this fizzle off as a false breakout.
Give us your top ideas for the week.
ANTHEM (LTP: 809)
View: Buy
Target: 895
SL: 767
Anthem Biosciences is showing a strong bullish setup after confirming a breakout above its recent consolidation range. The stock has generated a fresh Supertrend buy signal and simultaneously broken out of a declining trendline on both the daily and weekly timeframes, indicating a resumption of the primary uptrend. The breakout is supported by improving momentum indicators, with the RSI holding firmly above 60, reflecting sustained buying strength and positive price momentum.
Price action suggests that the recent consolidation between 740 and 810 was a base-building phase, and the breakout above the range high increases the probability of trend continuation. The positive MACD crossover further supports the bullish bias.
As long as the stock holds above 767, the breakout structure remains intact. A sustained move above 810-815 could propel the stock towards the 895 over the coming weeks. Protect losses with stoploss placed below 767.
IMFA (LTP: 809)
View: Buy
Target: 895
SL: 767
IMFA is exhibiting a strong bullish technical setup after breaking out of a downward-sloping trend channel that had capped the stock’s movement over the past few months. The breakout is accompanied by a fresh Supertrend buy signal, indicating a potential trend reversal and the resumption of the broader uptrend. Momentum indicators further support the bullish view, with the daily RSI moving above 60, reflecting strengthening buying interest and improving price momentum.
In the higher timeframe, the outlook has turned increasingly constructive. The stock has formed a bullish Marubozu candle on the weekly chart, signalling strong conviction among buyers. Additionally, the weekly MACD histogram is showing exhaustion in negative momentum, often an early indication that a medium-term upswing is developing.
The breakout above the channel resistance suggests scope for a move towards 1550 over the coming weeks. The bullish view remains valid as long as the stock sustains above 1408, which should act as a key support and stop-loss level.