Market sentiment is turning bullish after the Nifty weathered geopolitical shocks to eye the 25,000 mark. While retail giant Trent faces a sharp reality check, Kalyan Jewellers is showing signs of a potential breakout. Rupak De, Senior Technical Analyst at LKP Securities, breaks down the key chart structures for Nifty IT and shares his top three high-conviction buy ideas for the week ahead.

Edited excerpts from a chat:

Nifty broke the four-week winning spell after Trump revived strikes on Iran. What are the charts indicating now?

As US President Donald Trump stated that the ceasefire was over, markets around the globe were spooked and crude oil prices spiked. However, there was no significant escalation thereafter, and markets recovered.

The recent fall took the Nifty lower, but it found support at the 50% retracement of the previous rally from 23,070 to 24,530. Besides, a bullish Harami pattern has formed on the daily chart, and the Nifty has started moving higher following the formation. Overall, the sentiment looks positive for the short term, or at least until it falls below 23,800. On the higher end, the uptrend might continue towards 24,800-25,000. Therefore, traders may continue holding longs or creating longs unless the Nifty breaches 23,800.

Nifty IT index ended the week 2% higher. Is the risk-reward now better for bulls?

IT stocks witnessed some bottom fishing, leading to a 2% rise over the week. However, IT bulls need to do some manoeuvring to take the index into the bullish zone. During the week, the index found stiff resistance at the 50 EMA, which limited the recovery. Over the next few days, if the index does not move above the 50 EMA, which is placed at 28,454, a fall is likely. On the other hand, a decisive move above 28,455 may bring renewed optimism and could drive the index higher in the short term.

Kalyan Jewellers hit a fresh 52-week high and ended the week around 25% up. Is this jewellery stock gearing up for a bigger bull run after a forgettable 2025?

Kalyan Jewellers witnessed a sharp rally during the week, especially in the last two trading sessions, which took the stock to a new 52-week high. This rally has pushed the stock above its 50-week EMA for the first time in a year, suggesting that investor confidence has returned. The stock looks positive for the short to medium term, with the potential to rise towards 600 and higher. On the downside, 430 would act as a support level, below which the stock could move back into a decline.

Trent's Q1 update disappointed investors and the stock is down 13% in one week. Do you see a near-term bottom being made or will the entire rally in June get wiped out?

The fall in Trent during the week was sharp, as the stock eroded investor confidence by declining significantly in a single session. In the subsequent three trading sessions, the stock failed to recover, indicating that investors are not confident about an immediate reversal. The stock has fallen below its 50-week EMA, suggesting the failure of the recent breakout. While a recovery may occur later, the chart currently appears weak. A significant reduction in exposure to the stock appears to be a prudent strategy.

Give us your top ideas of the week

BUY ICICIBANK | Entry: 1401 | SL: 1359 | Target: 1470

The stock has moved higher following an inverted Hammer pattern on the daily chart, suggesting a possible reversal in the near-term trend. The short-term trend looks positive, as the price has been sustaining above the rising 50 EMA. The recent fall found support around the previous swing high, reinforcing bullish sentiment. Besides, a double bottom breakout has been seen on the hourly chart. The setup looks conducive to an uptrend in the short term.

BUY ASTERDM | Entry: 808 | SL: 769 | Target: 868

On the daily chart, the stock has been trading within a rising channel, indicating a sustained uptrend. The price continues to hold above the 50-day EMA, reflecting a positive underlying trend. The RSI has entered a bullish crossover, signalling strengthening momentum. Additionally, the stock appears poised for a breakout following a period of consolidation, supported by improving sectoral strength. Based on the current technical setup, the stock is likely to witness further upside in the near term.

BUY MINDACORP | Entry: 699 | SL: 679 | Target: 745

The stock is witnessing healthy buying interest following a brief phase of consolidation, indicating a gradual improvement in near-term sentiment. The RSI has formed a hidden bullish divergence on the hourly chart, as the oscillator registered a lower low while the price held above its previous low, signalling underlying strength despite the recent pullback. Additionally, the stock has found support above a minor swing high, reinforcing the positive price structure. Overall, the technical setup suggests that a meaningful recovery is likely over the near to short term.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)