According to Religare Broking's Ajit Mishra, the Nifty has been consolidating in the 23,800–24,400 range for nearly six weeks after failing to sustain above its long-term average, the 200-day exponential moving average (DEMA). The index continues to hold above a rising trendline support placed around 23,600, connecting the April and June lows, which keeps the broader recovery structure intact. A decisive breach below 23,600 could weaken the trend and drag the index towards 23,000 or lower, while a sustained breakout above the 24,400–24,600 zone would signal a fresh leg of the uptrend, opening the door for 25,600 initially, followed by the possibility of a new record high over the next few months.
The recent recovery in the Nifty IT index appears to be a rebound after successfully retesting the key support zone around 26,000. While the momentum has improved, it is premature to classify it as a structural trend reversal. A decisive move above 29,800 would strengthen the recovery and could drive the index towards 31,000–31,500, with the 26,000–27,000 zone expected to provide strong support. A sustainable bullish reversal would require the index to establish a higher high-higher low structure and eventually surpass the crucial 32,000 mark.
The banking space has turned increasingly stock-specific following the Q1 earnings season, with sentiment weakening after HDFC Bank reported margin compression. Axis Bank, Kotak Mahindra Bank, and IndusInd Bank also witnessed pressure after their quarterly numbers, while ICICI Bank and Federal Bank displayed notable resilience and are trading close to their record highs. Given the mixed earnings outcome and the lack of a clear trend in the banking index, investors should adopt a selective approach, with relatively stronger names such as ICICI Bank and Federal Bank appearing better placed for gradual accumulation.
The defence sector continues to maintain a favourable long-term outlook, driven by a strong order pipeline, increasing indigenisation, rising defence exports, and the government's sustained focus on strengthening domestic manufacturing capabilities. Despite valuations becoming relatively expensive following the recent rally, the sector's structural growth story remains intact, with timely order execution and healthy inflows expected to drive earnings over the medium to long term. Companies such as HAL, Bharat Forge, Data Patterns, and Solar Industries are well placed to benefit from these structural tailwinds, given their strong positioning across aerospace, defence manufacturing, electronics, and ammunition.
From a technical perspective, the pharma and healthcare space appears well placed to outperform during the remainder of the calendar year. The sector has been witnessing improving relative strength against the broader market, supported by sustained buying interest, favourable chart structures, and consistent participation across large- and mid-cap names. Fundamentally, stable export demand, easing pricing pressures in key overseas markets, healthy product pipelines, and improving domestic healthcare demand further reinforce the outlook. According to Old Bridge Asset Management's Kenneth Andrade, profitability in pharmaceuticals is expected to accelerate by financial years 2027-28 (FY28) and 2028-29 (FY29), with companies that invested in manufacturing and research over the past five years now well positioned to benefit from rising opportunities linked to patent expiries in global markets. While intermittent volatility cannot be ruled out, the sector's defensive characteristics, earnings resilience, and strengthening technical setup make it an attractive space to watch over the coming months.
