Question
On the Nifty and the Sensex, how are you seeing the near term and the medium term in terms of levels and the kind of sharp upmove that we’ve seen?
Answer:
If we look at what we saw in October, we had seen the Nifty basically de-rate back to the bottom end of the trading range that we’ve had since 2024. So that was around the 21,800 to 22,000 area. That’s where we saw momentum slow down, and obviously the rally that we’ve seen now through October and November, with momentum still confirming it. We’ve retaken the 200-day moving average, and last week we broke above the midpoint of that trading range that we’ve had since 2024. So, with that short-term breakout through the midpoint of the range, with momentum still rising, we’re basically looking for the continuation of this rally towards 26,300. Now that’s the top end of the range that we’ve seen since 2024, and we are likely to see some hesitation there. But if we look at the longer-term profile of this trading range since 2024, we think it is ultimately a platform that provides the foundation for the breakout and the longer-term uptrend that we’ve seen develop since the 2020 lows to resume. And what does that suggest, ultimately, if we break through 26,300? It suggests that we’ve got targets that stretch from 31,000 up to 40,000. So that’s the high level. But in the short term, we should expect further gains towards 26,300.
Question
And what is the probability that you would assign to breaking past 26,300 and heading to 29,000, which is the next level?
Answer:
Yes, I think it’s highly probable. One of the longer-term indicators that we look at is a COPIC indicator. This is based on monthly data, and interestingly, if we close above 25,500 by the end of November, we’ll actually generate the first long-term buy signal that we’ve seen since August 2020. If you go back to 1993, we’ve only seen 12 of these buy signals. The average return over the following 12 months is over 34%, and there’s only been one instance where it didn’t produce a positive return over that 12-month period. So that is one of the more successful longer-term indicators that we look at, and we think that’s likely to either be triggered in November or sometime in the fourth quarter. That gives us this longer-term idea that this is the foundation for that longer-term uptrend to resume.
Question
For the Nifty to go higher, we need some of its constituents to do well as well. So, in particular, I’d like your thoughts on Reliance. While the frontline indices have crossed past important moving averages, Reliance is still slightly below the 200-day moving average. Where does that one go?
Answer:
Look, this very much reflects the trading range that we’ve seen in the Nifty since 2024. So, the stock has been range-bound; it has recovered again to the midpoint of the range. I don’t really see Reliance as the leadership stock. I think it performs in line with the index. But what we’ve clearly seen as the major driver of the recovery, and the likely driver through 26,300, comes from the banking sector. Last Thursday, we broke out of the trading range that we’ve seen develop in the banking index since February. That does give us another 20% upside on the banks chart towards 70,000 on the broader NSE Banks Index. So, this is what we think will be the key driver to the top of the range, with leadership coming from the banks.
Question
70,000 on the Nifty Bank, and I presume a large part of that would be attributed to HDFC Bank. Do you have a call there?
Answer:
Yes, so HDFC Bank, I’d probably put in the same camp as Reliance, in that it’s more range-bound. Yes, it can trade to the top of the range, but if you’re looking for the leader here, at least from a chart perspective, the breakout in ICICI last Thursday is the key signal there, and that breakout gets us up to the ₹1,900-2,000 area.
Question
I want to ask you first about the mother market. The US market has been rock-solid, right? Those indices have been running away. We in India have underperformed. But what do you make of the mother market first? Do you think it’s bracing for a bit of correction, or do you think we’re in for a period of consolidation? And would you rule out a sharp drawdown out there?
Answer:
If you’re just a tech investor in the US, it feels quite painful. The S&P has held up better. This has been the rotation trade that we’ve really seen pick up momentum through the month of October, into defensives like healthcare and consumer staples. But you’ve also seen some of the rate-sensitive stocks in consumer discretionary, as well as property stocks, recover with a pullback in the US 10-year yield, and that’s what’s kept the S&P basically holding within a trading range. Whereas if you look at the Nasdaq, it did break below the 200-day moving average last Thursday, as well as the July lows. So, it does point to more weakness when you’re looking at that largecap tech index in the US. While the S&P, because of the megacap stocks still having a fairly significant weighting in it, is likely to remain range-bound, the rotation beneath the surface keeps the index more range-bound, whereas the Nasdaq has broken down.
Question
But what range do you want to tell us with regard to the Nasdaq or any of the US indices?
Answer:
With the Nasdaq’s breakdown, you’re basically looking at a 23,800 downside target. For the S&P, we’re basically looking at 7,000 being a support area, and we’re looking at 7,600 as overhead resistance.
Question
Let’s talk about a couple of other assets that we in India have to track and take cues from the globe — crude. To the relief of Indian investors, we have seen crude oil prices correct from the $118-$120 per barrel mark to below $100 per barrel. What are you making of the charts on that one? And also, the dollar index, which was showing signs of weakness, and now it’s moved back to around $102 per barrel. Where are they headed?
Answer:
It’s interesting when you look at Brent. It’s really just been headline-driven, so there’s a lot of volatility, but essentially it’s in a trading range. During the periods of escalation in West Asia, Brent has tended to trade between $96 per barrel and $120 per barrel, the area that you mentioned. We backed off last week, and we’ve seen a bit of weakness today. We’re pressuring that bottom end to break back below the $97 area, and then we’ve got support at $90 per barrel and $70 per barrel. I think crossing back below $90 per barrel would be quite a good indication of a de-escalation in the Middle East. The last time we broke below $90 was when the MOU agreement was being set up and signed, and then when that came off the table, we broke back above the $97 per barrel area. So really, what we’re looking for is a break below $97 per barrel to target the $90 per barrel area, and $90 per barrel would be quite constructive for risk assets that are highly sensitive to the oil move. So that’s the key area when it comes to Brent. I was just going to jump to the question of the dollar index. If we look at it from a longer-term basis, the dollar peaked in 2022, and we have had a number of rally phases since 2022 that have continued to make lower highs. So, the base case for the longer-term view for the dollar is that we have made a major peak in 2022. On the shorter-term view, we’ve seen a bit of volatility, and we’ve actually seen the dollar strengthen year to date. But we’d really need to see the dollar get above 107 to signal any major breakout. And as long as we remain below 107, we think that major peak that was registered in 2022 remains in place. If I can just share an interesting observation, we’ve seen a breakdown in the dollar versus the rupee today, and we think the rupee can strengthen towards the 93 area. So, after this consistent period of underperformance by the rupee, the break back below 94 does suggest we can see further strength towards the 91 area for the rupee.
Question
Do you have a call on the IT space in India right now? Given the recovery that we’ve seen from the lows, but at the same time the drubbing that we’ve seen from the highs, a lot of people on the fundamental side do believe that maybe a large part is priced in. Is it reflective in the charts as well?
Answer:
Definitely, the NSE IT index, in chart terminology, created a head-and-shoulders basing pattern over the last five months, and the break above the 31,000-32,000 area confirmed the breakout of that base. We have an upside target of 40,000. In fact, this base at the 21,800 area for the Nifty was led by the consolidation and the breakout that we started to see in the IT sector. So that’s led, and we’ve now seen banks take the leadership. But we do think, technically, there’s a base in place for the NSE IT index that ultimately gets us back towards 40,000.
Question
Any other stocks in India that you’d like to call out, where you have strong views on the way up or down?
Answer:
So definitely banks are the key sector there. I did mention ICICI as an individual stock that is one of the key drivers. But, given the setup for the Indian market to ultimately break through the 26,000 area, we think IT will continue to recover, and we do need those two largecap sectors basically working in unison to get that major breakout. And the final point that I’d make is, the Indian market is set up for that longer-term monthly signal to come through this month. It doesn’t mean you have to close your eyes and rush out and buy the market today. But looking at a 12-month horizon, that’s one of the indicators that we have a very high hit rate on. So, it’s worth noting.
Question
On Korea and Taiwan, I remember you said that when we were in the midst of an AI sell-off back then, you called it, I think, market de-grossing rather than a structural meltdown in some of these AI plays. Do you have a view on what’s likely to happen with Korea, Taiwan, and some of these AI stocks?
Answer:
Let’s start with the relative conversation. If we look at India versus the broader emerging market index, which is skewed towards North Asia, you know, we saw India drop 50% versus the broader emerging market index since the 2024 relative highs, and we’ve started to see India move up in absolute terms, but also in relative terms. That has come at the same time that we’ve seen Korea break down. It’s below its 200-day moving average, and it’s actually now below the lows of April this year. So that whole momentum move that we’ve seen, we have taken out. We don’t see any major evidence of a base developing just yet, and there is some further downside risk. And Taiwan had held up in relative terms versus Korea in particular, but the weakness that we saw last week saw the Taiex Index break its 200-day moving average as well as its July lows. So, it looks very similar to the breakdown that we’ve seen in the Nasdaq. So, there is some downside risk in those markets still, without any evidence of a base developing.
Question
In the past, you’ve given us some views on gold as well as silver, right? You know, both of those have actually fallen from their peaks, though on a year-on-year basis they are still higher. Silver is more or less flat, but gold is still a little bit higher. Do you think the bulk of the correction is already done, and has it now formed some sort of a near-term base?
Answer:
If you look at gold, it’s quite interesting that in October 2025, 3,888 was basically the low. And then if you look at June-July this year, we started forming a base in the $3,900 per ounce to $4,000 per ounce area, and we’ve recently come back to retest that area. That’s where we’ve started to rebound from. So, it does look like we’re getting a floor in gold prices, where we think you can accumulate. The longer-term trend, we believe, is still higher over the longer term, and this is a level where we can accumulate gold positions, looking for an ultimate break back above the $4,500 per ounce area. So, you can accumulate gold around the $4,000 per ounce level as it continues to base out above this point.
Question
And silver?
Answer:
Silver is a bit more volatile. I mean, it typically does have a higher beta than gold. It did break below $55 per ounce. It has started to recover. It typically does lag the initial moves in gold. So, my preference here is to start adding to gold, and we’d look for more evidence on the silver side before determining where the breakout levels will be. I’d put gold first, and then we can reassess silver’s price action.
Question
Also, in the past we’ve discussed a couple of other sectors. I think cables and wires were something that we discussed in the past. You know, market infrastructure plays and exchanges were something that you were bullish on earlier, and BSE and MCX have done very, very well. Have you tracked the charts of late?
Answer:
MCX is breaking out again, so it extends that uptrend. BSE pulled back to its previous breakout point. It’s also hooked back higher again. So, both stocks are resuming their uptrends. MCX is leading here, but BSE also looks like a setup where we can at least retest the highs that we made earlier this year. So, both stocks are in good shape to resume the uptrend.
Question
Is there anything that you believe is perhaps a short trade from here on in India?
Answer:
So, if I look across the markets, even the FMCG stocks have recovered off their lows. So, it’s important here to look at it in relative terms because we’re getting a rally across the board. So, what are the parts of the market that are seeing relative underperformance? One is the materials side, which is quite interesting because it had been a leadership group in the first half of this year, and the relative indicators have started to roll over. So, I’d be underweight or use the metals and materials space as a funding short. And again, if I go back to the FMCG side, yes, it’s rebounded in absolute terms. But if you look at the sector relative to the Nifty, that remains in its well-defined downtrend that has been in place for the past three years. So, it’s another sector to keep as a funding short and underweight.
Question
And that’s a secular call on FMCG. You don’t believe that there are individual stocks which are likely to outperform in that space?
Answer:
So, there are individual stocks, but if you’re looking at the broader sector, it’s still an underperforming sector.
Question
And we celebrate Diwali with a lot of sweets. But if 25,500 comes by the end of this month, then we’ll probably be sending some sweets over. The bulls would be sending some sweets over to you as well.
Answer:
Something to celebrate even more.