The Nifty50 had jumped 4.2% last week.

The stock market is expected to open lower on Monday with the Sensex and Nifty likely to begin the week on a quiet note. This comes as investors look for fresh triggers after a strong rally last week.

Both benchmark indices ended in red on Friday. Traders chose to book profits after days of gains. The Nifty50 had jumped 4.2% last week, while foreign portfolio investors bought shares worth Rs 15,925 crore, marking their fifth straight week of buying.

Market experts say there is still positive momentum in the market, but traders should be cautious and focus on key levels.

Aditya Gaggar, Director of Progressive Shares, said, “The weekly line chart of the Index displays a rounding bottom breakout, signaling strong bullish momentum. The key levels to watch for the Index are resistance at 25,200 and support at 24,930. In BankNifty, a Bullish Flag and Pole formation is forming, with immediate resistance at 55,580 and support at 54,900, awaiting breakout confirmation.”

He added that many sectors are showing strong signals on the charts. These include auto, energy, metal, pharma, real estate, and railways.

Gaggar shared a detailed sector-wise breakdown of how different parts of the market are looking based on chart patterns:

Gaggar concluded, “Summing up all the above analysis, we conclude that the ‘buy on dips’ strategy would be ideal.”

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said, “An apparently perplexing trend from the last trading day is that the market declined despite Rs 14,018 crore of institutional buying (FIIs plus DIIs). This indicates that FIIs are increasing their short positions in the derivatives market. So expect more volatility ahead.”

He also warned about the recent rally in defence stocks.

“An important trend in the market is the sharp rally in defence stocks. Even though this segment has bright medium to long-term prospects, their valuations have become excessive and, therefore, investors have to be extremely cautious. Some profit booking in this segment would be appropriate,” Vijayakumar added.

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