According to Geojit Investments' Anand James, the Nifty IT index is showing signs of bottoming out after hitting a low on 14th May. Derivative data supports this view, with earlier positioning reflecting a bearish undertone but nearly 90% of stock futures witnessing short covering on a week-on-week basis. This suggests that bearish positions are being unwound and provides room for a relief rally, though the sustainability of this upmove remains uncertain with 30,900-31,000 expected to act as strong resistance. The absence of significant fresh long build-up indicates that conviction in the uptrend is still limited, as reported by The Economic Times. Moneycontrol Pro now confirms that Nifty IT shows positive momentum building and is moving towards the improving quadrant, positioning it to potentially enter the improving segment soon and deliver a decent bounce in performance going forward.
As reported by The Economic Times, James expects Nifty to attempt a range breakout above 23,700 during the monthly expiry week. Successive days of close not far from 23,700 in the last seven days suggest high odds of a range breakout, with Nifty having two consecutive days of close above the 10-day SMA for the first time since 8th May. The potential move into the 23,900-24,450 band depends on the ability not to slip past 23,600, while major support is seen far at 22,800. Analysis of the last four months' straddles indicates that after strong volatility expansion in March–April 2026, May has been calmer with relatively lower but elevated straddle levels, reflecting a coiling market condition where the range has tightened.
According to Moneycontrol Pro, the Client Net Index Futures Position indicator has a compelling historical track record of flagging important market bottoms, with the latest reading standing at 1,61,664 - a level that suggests bearish positioning among clients may be significantly overstretched. The RMI Buy signal indicator has once again dipped into the oversold zone before turning upward, mirroring the behaviour seen at prior bottoms and suggesting that selling pressure across the broader market may be gradually exhausting itself. Nifty 50 closed at 23,719.30 with a modest weekly gain of 0.32%, while the Nifty Midcap Select advanced 1.50%, outperforming the benchmark. IT stocks rallied 4.31% leading sectoral performance, while Nifty Realty gained 2.39% and financial heavyweights stabilised. However, Nifty Media saw the sharpest losses at 4.29%, with FMCG and pharma also witnessing mild profit-booking.
According to James, momentum indicators have already started to turn negative in the pharma sector, with the RSI slipping from overbought territory indicating fading bullish strength. The formation of a bearish Marubozu candle highlights strong selling pressure and confirms the initiation of a near-term pullback. Derivative data indicates that around 90% of stock futures have witnessed long unwinding, suggesting a corrective move ahead. Price action suggests the index may drift lower in coming sessions, with immediate support placed near 24,400, below which the decline could extend towards the 24,060-23,970 zone. The ongoing decline is likely to be a corrective move within the broader uptrend unless key supports are decisively breached.
