Rajesh Palviya, Senior Vice President of Research at Axis Securities, has expressed a positive stance on the Indian equity market, highlighting key technical levels that investors should watch. In a detailed interview, he provided his near-term outlook on major indices and shared insights on sectoral momentum and trading strategies.
Nifty 50 and Bank Nifty: Key Levels and Outlook
Palviya noted that the Nifty 50 index is in a firm bullish trend, trading comfortably above all its key moving averages. He identified a critical support band between 25,700 and 25,900. This zone is significant as it aligns with the 50-day moving average and a previous breakout area. According to him, as long as the index holds above this support band, the overall market bias will remain positive, making a "buy on dips" approach the most suitable strategy for traders.
On the upside, he sees near-term targets at 26,350, followed by the 26,500–26,600 range for the December series. A move towards 27,000 is possible if global risk sentiment continues to support equities.
Regarding the Bank Nifty, Palviya pointed out that it remains a market leader, having recently scaled new peaks. He stated that key support for any short-term pullback lies in the 59,000 to 58,700 range. Meanwhile, a supply zone is established between 60,200 and 60,600, where consolidation or profit-booking in banking stocks is expected before the next leg up.
Mid and Small-Caps: Consolidation, Not Correction
Addressing the recent volatility in mid and small-cap stocks, Palviya reassured investors that the technical structure suggests a healthy consolidation rather than the beginning of a deep correction. He explained that after a strong multi-month rally, some cooling off is natural. Both indices continue to trade within their rising channels, with pullbacks being contained near important moving averages. Momentum indicators like the MACD are flattening but not turning negative, supporting the consolidation view.
Sectoral Momentum and Flow Trends
From a sectoral perspective, Palviya observed that cyclical and financial sectors continue to lead. Specifically, PSU banks, autos, and select capital goods stocks are showing strong momentum on weekly charts. Defensive sectors like IT and pharmaceuticals, which have lagged, are now showing early signs of potential basing patterns and bottoming signals, though they require more confirmation for a sustained reversal.
Commenting on fund flows, he highlighted the ongoing tug-of-war between Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs). While FIIs have turned cautious due to global factors, strong and consistent buying from DIIs, fueled by systematic investment plan (SIP) inflows, has provided a cushion and kept indices near record highs.
Preferred Trading Strategy and Stock Picks
Palviya's preferred technical strategy in the current environment is unequivocally to buy on dips in structurally strong sectors and stocks. He emphasized that indices and leading sectors are in clear uptrends, and every dip of 3–7% over the past six months has been aggressively bought. He advised combining this approach with momentum or breakout trading in relatively stronger sectors like banking and capital goods.
He also stressed the importance of position sizing and strict stop-losses, given elevated valuations and intermittent FII selling. Traders should avoid chasing parabolic moves in smaller stocks. Among specific stocks, Palviya mentioned Ashok Leyland, Glenmark, Biocon, Union Bank, Federal Bank, Asian Paints, Vedanta, Hindustan Zinc, Wipro, Mphasis, and Siemens as names poised for a bullish trend in the coming weeks.
In summary, the expert view from Axis Securities paints a constructive picture for the Indian market, underpinned by strong technicals and domestic liquidity, with defined levels offering guidance for investors.
