Sectors Expected to Outperform in the Short Term

Sectors Expected to Outperform in the Short Term

Nifty Pharma: As predicted, Nifty Pharma has shown strong performance over the past week. With a recent breakout above a horizontal trendline, the sector seems poised for continued growth. It is expected to test the 20,700 level, with the psychological barrier of 21,000 also within reach in the near term. On the downside, the 20,000-20,100 zone should offer support in case of any short-term corrections.

Nifty IT: Over the past couple of weeks, Nifty IT has outperformed the main indices. The ratio chart comparing Nifty IT to Nifty is at an 11-week high, indicating a bullish trend. The sector is likely to challenge its previous high of 38,559, recorded in February 2024. A sustained move beyond this level could trigger a fresh rally. In case of a pullback, the 37,100-37,200 zone is expected to provide support.

Railways and Defense: These sectors have experienced strong bullish momentum with significant trading volumes recently. They are likely to continue their upward trajectory in the coming trading sessions. However, it is advised to use a strict trailing stop-loss to manage risk in these sectors.

Nifty Auto and Nifty Metal: Both sectors have been consolidating in recent sessions, leading to a narrowing of the Bollinger Bands, a technical indicator that suggests a potential breakout. This “Bollinger Band Squeeze” often precedes significant market movement, signaling that a trending move is likely in the near future.

Nifty Oil & Gas: The sector has broken out of a horizontal trendline on the daily chart, and the RSI (Relative Strength Index) remains above 60, indicating strength. Nifty Oil & Gas is expected to continue its upward movement, with targets at 12,800 and 13,000 in the short term. The 12,150-12,200 range should act as immediate support in case of a dip.

These sectors are expected to maintain their momentum, offering potential trading opportunities in the short term.