Nifty may stay range-bound at 23,600-24,600, says Dharmesh Shah; Bosch, Union Bank among top picks – Markets

Nifty technical outlook: The equity markets extended their losses on Monday with the Sensex falling for a second consecutive session and the broader Nifty declining for the fifth straight day as rising crude oil prices continued to weigh on investor sentiment.

On a weekly basis, the equity benchmarks snapped a two-week winning streak to close on a subdued note at 24,366, down 0.8% on Friday. According to Dharmesh Shah, Technical Head and Vice President at ICICI Securities, while large caps caught their breath, the broader market took centre stage as the Midcap index clocked fresh highs, relatively outperforming with a 0.7% gain. Sectorally, Consumer Discretionary, Realty, and Defence remained in limelight while metal, financials took a breather.

Shah said the lack of through strength resulted in extended correction towards 200 days EMA (24385). Consequently, weekly price action formed a bear candle carrying lower high-low, indicating extended breather.

“As we complete the earnings season, Nifty is transitioning into a volatility contraction pattern. Historically, breakouts from contracting range usually resulted into bigger moves in subsequent weeks. Given the sustained outperformance during earning phase in PSU Banks, Pharma, Realty,Capital Goods and Defence, any corrective dips should be viewed as an accumulation opportunity in a stock backed by strong earnings as immediate support for Nifty is placed at 24000 being placement of three months rising trend line that coincided with gap area seen during 29th July (24040-24136),” he stated.

Over past eight sessions, Shah said Nifty retraced merely 50% of preceding seven session ~1150-point upmove, indicati, hng slower pace of retracement. This shallow, time-wise consolidation has effectively cooled off overbought conditions without compromising the larger uptrend.

Shah further stated that it is important to highlight that, during past eight sessions, index failed to sustain above previous session’s high. “Thereby, a decisive close above previous session high would be required to pause the ongoing corrective move and resolve higher towards 24600 in coming week,” the analyst noted.

Structually, since April 2026, Shah said the index has seen forming “higher lows” while pricing in host of negative news on geopolitical uncertainty and crude oil volatility. “Hence as long as Nifty holds above the previous swing low of 23600, the positive bias remains intact. A decisive breakout above upper band of past four months consolidation (placed at 24600) would trigger the next leg of up move till then prolongation of consolidation in 24600-23600 range,” he concluded.

Shah said the constructive stance is based on following observations:

Over past three decades there have been 8 occasions where Nifty has remained below its 200 days EMA for at least four months. The subsequent move, after reclaiming its 200-day EMA, has been noteworthy as it delivered average returns of 12% to 19% over the next 3 to 6 months. Currently, the index is forming a higher bae after reclaiming its 200-day EMA after four months of consolidation.

The Midcap index continued to record fresh highs while small cap index traded in the vicinity of All Time High that is backed by significant improvement in the broader market as currently 56% of stocks of Nifty 500 universe are trading above 200 days SMA compared to three weeks back reading of 48%

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)