Nifty Nears Breakout Point; Angel One Analysts Advise Caution

Last week saw a notable rebound in the Nifty index, which managed to recover most of the previous week’s losses. Despite a slow start, buying interest picked up quickly as investors took advantage of the market dipping to lower levels. After a brief consolidation phase, the index extended its gains and ended the week at 23,053, marking a 2 percent rise over the period.

Technical analyst Hitesh Rathi of Angel One observed that Nifty has remained in a sideways range for five weeks running. The recent bounce from the 22,400 to 22,500 range highlights strong buying support at those levels. This area aligns with a rising trendline on the weekly chart, which has served as a reliable support point multiple times. The improvement in market breadth and overall sentiment has also helped ease investor concerns, although resistance overhead remains a challenge for further gains.

Looking ahead, Rathi advised caution unless Nifty can decisively break above the 23,150 to 23,200 resistance zone. A successful breakout here would create a higher high and higher low pattern on the daily chart, suggesting a possible shift in the short-term trend. Confirmation on the weekly chart would strengthen this outlook. Until then, investors should avoid aggressively chasing upward momentum.

Support levels to watch include the 22,900 to 22,950 band, with a stronger floor at 22,800. On the upside, hurdles exist at 23,100 to 23,160 and more firmly at 23,400 to 23,450. Despite the positive moves in large-cap indices, the trend for Smallcap and Midcap segments remains bearish across multiple timeframes. As a result, any breakouts in these areas warrant cautious evaluation and disciplined risk management.

Turning to specific stock ideas, Angel One highlighted HCL Technologies as a bullish candidate. The stock recently showed signs of a trend reversal, breaking out from consolidation on daily charts. A golden crossover where the 20-day exponential moving average (EMA) rose above the 200-day simple moving average (SMA) signals strong momentum. Additional confirmation comes from the Point and Figure chart’s bullish breakout and a positive swing breakout on 0.5% Renko charts. The recommendation is to buy HCL Tech around ₹1,425 to ₹1,428, with a stop loss at ₹1,362 and targets between ₹1,520 and ₹1,530.

Samvardhana Motherson International also attracted bullish attention. Support around ₹150 to ₹148 is reinforced by multiple technical factors including bullish patterns on Point and Figure charts and candlestick formations. Long wicks on daily candles suggest selling pressure may be losing steam. The advised entry is near ₹154 to ₹155, with a stop loss at ₹149 and targets set in the ₹165 to ₹168 range.

On the downside, Dixon Technologies presents a bearish picture. The stock experienced a bearish crossover of its 20-day EMA below its 200-day SMA and 50-day EMA, signaling a weakening short-term trend. Further bearish signals include a double bottom sell pattern and a breakdown confirmed on Renko charts. The recommendation is to sell Dixon Technologies around ₹11,000 to ₹11,010, with a stop loss at ₹11,570 and downside targets between ₹9,750 and ₹9,800.

These market insights come amid ongoing volatility and mixed signals, underscoring the need for careful stock selection and risk controls. The broader equity market continues to grapple with resistance levels and sector-specific pressures, especially among smaller companies. Investors following these developments should remain vigilant and avoid overextending into uncertain market moves.