“No, it is definitely a more optimistic picture. What has happened is that at the recent low, we ended up building a lot of positive divergences in price action versus momentum. We also ended up with a situation where a large number of stocks capitulated on Monday, resulting in some longer-term indicators reaching similar levels as what we had seen at the lows of March 23 or June 22, and that puts us in a very good place for starting a possible multi-month recovery.”A Bottom in Place?
According to Srivastava, the recent correction may have already established a short-term bottom, creating a favourable setup for investors willing to step in.
“So, this is a very good point. The risk-rewards are still very-very favourable for people looking at buying. The bottom will hold. We have most probably made the bottom for the month or two or three months, I do not know how long, but definitely made one in April. I do not think you will see the market go down.”
He also outlined potential upside targets, suggesting that the rally could have further legs in the near term.
“We are looking at going to around 24,000, on the upside maybe a little above that up to 24,600 is what we are open to, so that still leaves room for upside in the near-term trade.”
Banking Stocks Join the Rally
The banking pack, often seen as a market leader, is also showing encouraging signs. Srivastava pointed out that the Bank Nifty may have already formed a base.
“Similarly, on Bank Nifty also we have probably bottomed near 51,300. The immediate next breakout point being around 54,300 and then we could probably go towards 56,200 in the coming days. So, seeing further upside on banking as well.”
This aligns with the broader market sentiment, where financials are once again taking the lead in driving indices higher.
Realty Stocks: Bounce or Breakout?
One of the standout performers in the current rally has been the real estate sector. Stocks like Phoenix Mills, Oberoi Realty, and Signature Global have seen sharp gains, pushing the Nifty Realty Index higher.
Yet, Srivastava remains cautious on the sector’s longer-term outlook.
“So, it has been a tricky place because it was one of the worst performing sectors of last year, in fact since 2024, so more than one-and-a-half year it has been underperforming the market. It is going to be a tough call to say whether the gains you are seeing today are part only of a counter trend move again and the sector continues to stay down against the market as such or can it become a more sustainable case.”
In the short term, though, he does see some room for gains.
“So, in case realty that is a slightly tougher call. We will probably only be able to understand it a little later, but in the short term it is possible there is some more upside left. So, if I look at the Nifty Realty Index can go up to 750, currently we are at around 693, so still some room to gain over there.”
The Road Ahead
While the recent rally has improved sentiment, market participants may still need to tread carefully. The technical setup appears constructive, but confirmation over the coming weeks will be crucial.
For now, the message from the charts is clear: the worst may be behind—at least in the near term—but the durability of this recovery will depend on how the market builds from here.