Indian markets have demonstrated a strong rebound from last week's lows, but financial expert CA Rudramurthy BV, MD of Vachana Investments, is advising against fresh buying due to unfavorable risk-reward conditions. According to reports from The Economic Times, Rudramurthy stated that "after a 1,000-point move, buying fresh longs in the index right now is not a good risk-reward trade." He recommends waiting for a dip and looking at entry closer to 23,800 for Nifty, as neither a breakout nor breakdown appears imminent. The expert emphasizes that the sharp recovery from last week's lows has been impressive, but the current risk-reward dynamics simply don't add up for fresh long positions. Speaking to ET Now, he identified the 23,800 level as an important support zone while 24,300 remains the immediate resistance, with the index currently trading between these levels and limited upside for fresh long positions.
Adding to the caution, Bank Nifty has started underperforming Nifty over the last two to three sessions, representing a subtle but important warning sign that momentum is fading at the top. As reported by The Economic Times, this underperformance pattern suggests that the market's recent rally may be losing steam, particularly as the banking sector typically leads broader market movements. The divergence between Bank Nifty's performance and Nifty's recovery highlights potential weakness in the market's breadth and sustainability of the current rebound. While positive global and geopolitical developments could trigger a gap-up opening at the start of next week, ET Now reports that Murthy expects some profit booking to emerge after that initial strength, advising traders to use any meaningful correction as an opportunity to build fresh long positions rather than chasing the rally.
Rudramurthy strongly advises against investing in IT stocks, describing them as a 'falling knife' despite attractive valuations. According to The Economic Times, he noted that "people have been calling IT valuations cheap for a long time - and you would have lost enough money buying on that cheap valuation." His argument cuts through the usual comfort of blue-chip names like TCS and Infosys, emphasizing that when AI is fundamentally restructuring the business model of an entire industry, valuation alone is not sufficient as a margin of safety. The recent sell-off in information technology stocks following weak cues from Accenture has sparked debate over whether the sector has become attractive from a valuation perspective, but Murthy remains unconvinced. He warned against trying to buy stocks simply because they appear inexpensive, stating he would rather wait for greater clarity and stronger technical confirmation before entering IT stocks, even if it means buying at higher levels later.
Despite the overall caution, Rudramurthy has identified NBCC as his high-conviction call, highlighting that the stock has formed a classic rounding bottom and taken solid support in the 100–105 zone. As reported by The Economic Times, he sets initial targets of 135 and then 150, with a longer-term view of 180–200, while maintaining a stop loss at 105 on a closing basis. Another stock on his radar is Eternal, which has undergone an extended consolidation phase and established a strong base between ₹230 and ₹240. According to ET Now, a sustained move above ₹260 could pave the way for targets of ₹285 and ₹300, with a recommended stop loss at ₹245. The expert's approach emphasizes staying stock-specific, protecting gains, and using market corrections as buying opportunities instead of chasing prices higher, with his advice remaining simple: wait for Monday's gap-up opening and book partial profits in Nifty while avoiding IT stocks for now.
