Market after a rough week: What charts, VIX and key stocks are signalling
Following a significant weekly decline, the Nifty is nearing oversold territory, suggesting a potential short-term rebound. Technical indicators and a possible recovery in RIL offer some optimism, though a sustained drop remains a possibility if key resistance levels aren't breached. Traders are closely watching for market direction.
After a bruising week that saw the Nifty slide 2.5% and volatility spike, traders are scanning charts, the VIX and key stocks for clues on what comes next. Technical signals suggest the market is nearing oversold territory, raising the possibility of a short-term rebound even as uncertainty remains elevated. Edited excerpts from a chat with Anand James, Chief Market Strategist, Geojit Investments Limited:
After Nifty ended 2.5% lower last week by falling non-stop for 5 days, how bearish are the charts?
Steep falls that occur within a short time frame usually have a tendency to reverse once RSI hits 40. Incidentally Nifty’s RSI is near 38. Further, the upswing in RIL which alone contributed to nearly 25% of the index’s down move in the last week gives additional reason to consider possibilities of a recovery move. Alternatively, inability to close above 25776 during the week would have to be taken as a sign that Nifty is coming off a sideways trading range that has been on since November 2025, prompting us to consider possibilities of extended and long drawn decline, with 200 day SMA positioned deep near 25000 now.
**RIL was the biggest drag on the index amid news flow around Russian crude oil import and US raid on Venezuela. How would you trade the stock on Monday?
**Having retraced 62% of the Oct 2025 to Jan 2026 upmove, we are inclined to believe there might be a respite to the persistent selling seen in the last week or so. Such a swing higher could aim for 1490-1520. Else, if 1460 does not hold, look for 1420-1370.
India VIX also jumped sharply by around 16% in the week. Help us read the signal that the fear gauge is giving for traders?
The sharp jump in VIX was not unexpected, given the fact that it has been around record for a while now. Despite the rise, VIX is still under 11, and yet to signal that traders have become uncomfortable. We are looking for a stabilisation, at least briefly, with VIX having tested its 50 day SMA.
BHEL shares ended the week around 9% lower. On Friday, the stock did make some attempt to recover losses made on Thursday. Do you expect bounce back in the week ahead?
The collapse being a single day event followed by an inside bar, we are encouraged to bet on upswings in the week ahead. However, given that the stock pierced the 50 day SMA for the first time since mid September and closed below it last week, it will be prudent to look for a pull back above 280, as a confirmation.
Monday's session would have TCS releasing its Q3 numbers. How would you trade the stock on D-Day? Looking at historical trends, TCS has shown a fairly balanced reaction on earnings day over the past decade, with positive moves averaging around 2%. Interestingly, in the last five years, the bias has been more on the upside, and these gains were often preceded by similar momentum in the prior week. Post-earnings performance has also been encouraging, with the stock delivering an average return of about 3% in the week following results.