Nifty eyeing 26,000 in short term, bet on these 3 stocks for the week: Rupak De

Nifty towards 25,500–26,000 in the short term, says Rupak De, Senior Technical Analyst, LKP Securities. He recommends buying TCS, DLF, and LTIMindtree for the week. Edited excerpts:

FIIs added net longs of 210k contracts in August in index futures vs 62k long contracts in July. What does the outlook for the September series look like given that Nifty ended up with a gain of 3.1% in the August series?

The September series started on a positive note as the index reached an all-time high closing, driven by improved optimism around Indian equities. On the daily timeframe, the index has given a swing high breakout, indicating a rise in market sentiment. The strength is likely to continue as long as the index remains above 25,000. However, a drop below 25,000 could trigger a significant correction. On the higher side, the current optimism might propel the index towards 25,500–26,000 in the short term.

In the previous series, short-covering was seen in HDFC Bank while the long build-up trend was visible in ICICI Bank, Axis Bank, and Kotak Bank. On the other hand, a short build-up was seen in SBI. So going ahead, do you think long private banks and short PSUs are a good bet?

Among the private players and PSUs in the banking sector, the former is attracting significant interest from buyers. After weeks of underperformance, it appears that private banks are ready to take the driver's seat, supported by a better risk-reward ratio.

Defensives like pharma and IT are gaining traction and outperformed Nifty Bank in the week.