F&O Talk: Smallcaps Look Strong on Charts, Says Sudeep Shah; Outlines Trent, Swiggy, Kalyan Jewellers Strategy

Sudeep Shah of SBI Securities expects the Nifty to remain rangebound, identifying 24,300–24,800 as the key trading levels. He favors a buy-on-dips approach, pointing to constructive technical trends in the broader market.

Shah notes that smallcap stocks remain bullish on the charts. He also highlights that potential short covering by Foreign Institutional Investors (FIIs) could lend support to the markets in the near term. FIIs have been significant participants in Indian equity derivatives, and shifts in their net positioning—tracked via metrics like the Long-Short Ratio—are closely watched for directional cues on institutional sentiment.

The Nifty Smallcap 100 continued to outperform its midcap and largecap peers during the week, gaining nearly 3% and scaling a fresh all-time high, according to Shah. The smallcap segment has been a standout performer in India's broader market rally, drawing increased retail and institutional interest even as benchmark indices have shown signs of consolidation.

Traders should monitor key technical levels across several stocks for directional cues. Shah outlines specific F&O strategies for the following names:

• Nifty and Sensex: Watch the coming week's range for directional signals.
• Smallcap index: Having risen nearly 3% this week and outperforming midcaps and largecaps, the strategy going forward warrants attention to momentum and chart patterns.
• Options data: Key Call and Put positions are building up in Nifty's near-term trading range.
• FII activity: The Long-Short Ratio provides insight into positioning trends.
• August F&O strategy: Shah's preferred approach—buy on dips, sell on rallies, or trade the range—depends on these technical signals.
• Individual stocks: Specific strategies are outlined for SBI, Trent, Kalyan Jewellers, and Swiggy based on their respective chart structures and key support/resistance levels.

Source: Economic Times Markets