With hopes of a Santa rally fading, traders head into the final week of 2025 focused on Nifty’s technical levels, derivatives positioning, and foreign investor flows. A recent pullback from record highs has reset the base, raising questions on whether the index can stabilise near key supports or see a late-year rebound.
Edited excerpts from a chat with Anand James, Chief Market Strategist, Geojit Investments Limited: The decline from the vicinity of the record peak was not unexpected, and hence it would be premature to count last week’s decline as the start of a major fall. Further, this is the first Friday among the last three, when we have had a decline in Nifty. This ensures that we would be entering the last week of the year on a relatively lower base. A regrouping of the bulls may be expected, once in the vicinity of 26,000, which, if successful, could turn into a vertical recovery aiming 26,550-850. Supports close by are at 25,935 and 25,850, a break of which would expose 25,740-650.
FIIs hold only 11.1% of their index futures positions as long, with no clear signs of turning bulls. In fact, though FIIs were seen adding longs mid-week, the trend was reversed on Friday, having cut longs by 7.5%, while adding index future shorts by 5.6%. While there are no outright signs of FIIs turning buyers, it is to be noted that last week ended with higher longs and lower shorts than the previous week, raising hopes of buying support from FIIs.
The Nifty India Defence Index rebounded strongly from the 7,400 horizontal support zone, forming a weekly pattern resembling a Morning Star, a classic reversal signal. The index closed above key levels, including the Supertrend at 7,750 and the 20DMA at 7,679, reinforcing positive sentiment. From a derivatives perspective, while Friday saw long unwinding in most stock futures, weekly data indicates short covering, aligning with a short-term bullish outlook.
On the stock front, names like HAL, BEL, Solar Industries, Mazagon Dock, GRSE, and BDL have posted robust weekly reversal patterns, suggesting continuation of the prior uptrend. This momentum could propel the index toward 8,050 and 8,300 in the short to medium term.
Long-tailed candles in the last three days, with the inability to see higher highs, point to exhaustion. But this may not be pointing to an outright reversal either. Braces of sideways moves initially, but dips to Rs 327-319, may see bulls regrouping. Alternatively, slippage past Rs 319 might discourage bulls from persisting with upside views.
Yes. While a vertical bounce back may not be seen, the foray into the oversold territory provides a setup for aggressive traders to accumulate and position for a bounce back. However, it could turn out to be a dead cat bounce if up moves were not stretched beyond Rs 1,727, raising risks of extended falls to Rs 1,550.
The stock has staged a notable ‘U’-shaped recovery this month, breaking above key levels, the Supertrend at 478 and the 20-day moving average of 458, supported by strong volumes. On the weekly chart, it has also crossed the falling trendline resistance near 466, adding to the bullish sentiment.
We anticipate an upside move toward 495 and 519 in the near term. Traders holding long positions should consider placing a protective stop-loss below 460 to manage risk.
The stock has been in a pullback phase since August, but has recently gained momentum. It ended the week with a bullish Marubozu candle, marking its highest close since June 2025. On the daily chart, NBCC broke above the Supertrend level of 117 on Friday, supported by strong volumes, indicating strong buying interest behind the move.
We expect the stock to head toward 124.5 and 130 in the near term. Long positions should be safeguarded with a stop-loss below 118.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of The Economic Times.)