Nifty finds support near 25,900; volatility offers buying opportunity, says Rahul Sharma

Indian equity markets showed signs of recovery with a return of buying interest, but traders should brace for heightened volatility in the near term, according to Rahul Sharma, Director & Head – Technical & Derivatives Research at JM Financial Services.

Speaking to ET Now, Sharma said the Nifty 50 has found near-term support around the 25,900–25,950 zone after recent sharp selling.

Nifty outlook: Volatility high, risk-reward improving

Sharma noted that despite a strong start in the latest session, the broader market structure remains bearish, prompting many retail investors to use rallies as exit opportunities.


“However, one encouraging factor is that FII cash selling has not been aggressive despite the sharp correction. In fact, FIIs were bullish in Nifty futures, indicating favourable risk-reward for long positions near the 25,000 level,” he said.

From a technical perspective, Sharma believes current volatility should be viewed as a buying opportunity, with the Nifty having the potential to move back toward 25,500 and even 25,800 once momentum improves.

He cautioned that the coming sessions could remain choppy due to multiple triggers, including the monthly derivatives expiry, the ongoing earnings season, and the upcoming Union Budget.

Nifty Bank also in focus

Sharma added that broader index movements, including Nifty Bank, will remain closely linked to overall sentiment and institutional flows. He expects sharp swings in both indices over the next few days, making disciplined trading and risk management critical.

Stock ideas: Defence and PSU banks preferred

On sectoral opportunities, Sharma highlighted defence as a key theme, citing expectations of higher government spending in the upcoming Budget.

Among defence stocks, Bharat Electronics Limited (BEL) stood out on technical charts.

“BEL has corrected the least within the sector and is forming a cup-and-handle pattern on daily charts. A breakout could take the stock to ₹455 initially, with ₹480 possible over the next 30 days,” Sharma said.

He sees 15–16% upside potential in BEL from current levels, recommending a stop loss at ₹380.

In addition, Sharma remains positive on PSU banks, naming State Bank of India, Canara Bank, and Bank of Baroda. For broader exposure, he suggested the PSU Bank BeES ETF.

Trading and investment view

Sharma said defence and PSU banking stocks have already seen selective buying during recent volatility and could outperform if the Nifty stages a more meaningful rebound.

“For traders over the next 10–15 sessions, both sectors look attractive. From an investment perspective, BEL can also be considered on the buy side,” he said.