How RIL, HDFC Bank and ICICI Bank may drive Monday's market move? Anand James shares insights

Time of India

a day ago

Anand James
, Chief Market Strategist at
Geojit Financial Services
, cautions that Monday's trading will largely hinge on heavyweight earnings announcements. While
Reliance Industries
could act as a stabilizing force,
HDFC Bank
appears technically weak. With the Nifty breaching its 50-day simple moving average (SMA) at 25,036, James sees a test of critical support levels ahead. He also notes that banking stocks, despite recent selling pressure, are poised for a potential bounce.
Edited excerpts from a chat:
Q: Nifty ended in the red for the third consecutive week. What do the charts indicate for the rest of the July series? Will 25,000 remain a hurdle?
A:
Eighteen days after breaching the upper Bollinger Band, the Nifty tested the lower band for the first time on Friday. This, combined with weak directional movement indicators, suggests a sideways trend is more likely in the upcoming week than a vertical drop. Nifty also dipped below the 50-day SMA for the first time since crossing it in April. The 200-day SMA, currently near 24,078—about 3.5% below current levels—has stayed flat for most of the year. This shows the rally has lacked the momentum needed to pull the 200-day SMA higher. We expect a short-term swing higher, with the index unlikely to drop far below 25,000.
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Q: Nifty and Bank Nifty's moves on Monday depend heavily on the earnings of HDFC Bank, RIL, and ICICI Bank. How would you play the market on Monday? Any trading opportunities in the heavyweights?
A:
On Thursday, Bank Nifty slipped below its 20-day SMA at 56,907, triggering fresh selling. However, it managed to close above key support levels—the wedge pattern support at 56,277 and the 50-day SMA at 56,145—signaling a possible bounce on Monday. ICICI Bank and Kotak Mahindra Bank are closely mirroring the index and could lead a rebound early in the week. HDFC Bank, however, remains technically weak, having closed below both its 20- and 50-day SMAs, which could dampen sentiment.
From a derivatives perspective, banking stocks saw fresh shorts on Friday, but nearly 47% of stocks experienced short-covering week-on-week—supporting the case for a short-term pullback. We expect Bank Nifty to attempt a rebound towards the 56,600–56,850 zone early in the week. Sustaining above this range, however, would require renewed momentum.
Q: Nifty has breached its 50-day SMA. How vulnerable is it now?
A:
With the breach of the 50-day SMA at 25,036, Nifty looks vulnerable to further downside. Key support levels to watch are 24,750 and 24,480. Weakness in index heavyweights like HDFC Bank and TCS could intensify the pressure. However, Reliance Industries—Nifty's highest-weighted stock—might offer stability. It is currently forming a base near the 61.8% Fibonacci retracement level at 1,469 and the 50-day SMA at 1,459, which could help curb further declines.
Q: Defence stocks are facing sustained selling pressure. Is more pain ahead, or are we near oversold levels?
A:
Defence stocks
gained downside momentum last week after breaking out of recent sideways ranges. Despite the fall, oscillators have not yet reached oversold territory. However, directional indicators are weak, and most stocks are at their farthest distance from their 50-day SMA since early this year. This setup suggests that a mean reversion or bounce-back move could be on the cards in the coming week.
Q: Patanjali Foods rallied 17% this week. What's the outlook?
A:
The momentum remains strong, supporting the uptrend. However, we are cautious at this stage since the stock has closed above the upper Bollinger Band for four consecutive sessions. Oscillators are beginning to show signs of price exhaustion as the stock nears its April peaks. Entering now carries higher risk.
Q: Do you see further upside in GMDC after Friday's 15% surge?
A:
Remarkably, GMDC reversed a 12-day downtrend in a single session, swinging from one end of the Bollinger Band to the other. While this sharp reversal may be difficult to sustain, dips held above Rs 413 could offer a fresh entry opportunity. Traders may consider entering with a stop-loss at Rs 392.
Top Trading Ideas for the Week
Max Estates (CMP: Rs 551)
View: Buy
Target: Rs 567 – 585
Stop-Loss: Rs 532
The stock has formed an inverted Head & Shoulders pattern on the weekly chart since August 2024, with a breakout confirmed this week. The breakout aligns with the weekly Supertrend level at Rs 528, strengthening the bullish case. The MACD has also crossed above its signal line. We expect a move towards Rs 567 and Rs 585 over the coming weeks. Maintain long positions with a stop-loss at Rs 532.
SDBL (CMP: Rs 160)
View: Buy
Target: Rs 166 – 170
Stop-Loss: Rs 154.8
The stock reversed strongly this week, closing above horizontal resistance at Rs 157. The MACD is poised to cross above the signal line, and RSI has moved above its 14-day moving average—both bullish signals.
A bullish engulfing candle on the weekly chart further supports the positive view. We expect near-term upside toward Rs 166–170. Maintain long positions with a stop-loss below Rs 154.8.