Nifty Could Be Building a Base; Anand James Picks Ather Energy and Nazara Technologies

The Indian stock market may be going through a phase of consolidation rather than preparing for a deeper correction, according to Anand James, Chief Market Strategist at Geojit Investments. His assessment comes as the Nifty has remained under pressure during August, while investors continue to watch the crucial 24,000 level for signs of either stability or further weakness.

James believes the market's recent behaviour could represent an accumulation phase, where investors gradually build positions despite the absence of a strong upward move. The Nifty has struggled to regain its 200-day moving average, but repeated buying interest around 24,000 has so far prevented a significant breakdown.

24,000 Emerges as the Key Market Floor

For the coming September trading period, technical levels are likely to remain central to market direction. According to James, the Nifty has been moving within a broad range, with support developing around 24,000-24,050 and resistance appearing near 24,450-24,500.

A sustained move above 24,500 could improve the market's technical structure and potentially open the way toward 24,900-25,100. A further extension could take the index toward 25,500 if momentum strengthens.

The downside picture is more concerning if 24,000 fails decisively. James indicated that a sustained break below this support zone could weaken the prevailing structure and expose the index to levels around 23,700. Further declines could potentially take the index toward the 23,400-23,200 region.

This makes the 24,000-24,500 band particularly important for traders entering September. A breakout on either side could provide a clearer indication of the market's next directional move.

Options Data Shows a Cautious Market

Positioning in the September derivatives series also points to a market that is balancing optimism with caution.

Put open interest has increased significantly around the 24,000, 24,050 and 24,100 strikes. The 24,100 Put has the highest open interest among these levels, while the 24,000 Put also has substantial positioning. This suggests that traders are treating the region as an important support area.

At the same time, call open interest is concentrated around 24,200, 24,300 and 24,500. Such positioning indicates that traders expect rallies to encounter resistance unless the index manages a convincing breakout.

Implied volatility has also strengthened following the monthly expiry, signalling expectations of larger price swings in the new series. Overall, the options structure suggests a relatively narrow near-term range, with 24,000 acting as a floor and the 24,300-24,500 region presenting an important hurdle.

Ather Energy Retains Positive Momentum

While the broader index remains range-bound, James sees stronger technical opportunities in selected stocks. Ather Energy is among his preferred ideas.

The stock has maintained an upward trend since March and recently showed signs of renewed momentum after a short consolidation period. Strong buying during the latest session helped reinforce its bullish structure, while technical indicators have also become more supportive.

James highlighted the stock's ability to maintain a pattern of higher highs and higher lows. The Relative Strength Index remains close to 70, indicating strong momentum, while the Moving Average Convergence Divergence indicator is approaching a bullish crossover.

The technical view remains positive as long as Ather Energy holds above ₹1,560. James has identified ₹1,700 as the potential near-term target, with ₹1,560 serving as the key risk-management level in the setup.

Nazara Technologies Also Finds a Place Among Top Picks

Nazara Technologies is another stock that James sees as offering further upside potential.

The stock spent much of August moving within a relatively tight range before breaking out. The latest move was supported by strong multi-week trading volumes, giving greater weight to the breakout.

Momentum indicators have also improved. The daily MACD has generated a bullish crossover, while the RSI has moved above its moving average, suggesting that buying strength is improving.

Nazara has also retained its broader higher-high and higher-low structure. According to James, the bullish setup remains valid while the stock stays above ₹364. The technical target identified for the stock is ₹405.

September Could Be a Decisive Month

The market enters September with a mixed technical picture. On one side, repeated buying near 24,000 indicates that investors are willing to defend the key support zone. On the other, the inability of the Nifty to convincingly cross its overhead resistance suggests that buyers have yet to establish complete control.

For investors, the immediate focus is therefore likely to remain on the 24,000 and 24,500 levels. A breakdown below support could revive concerns about a broader correction, while a decisive breakout above resistance could bring renewed momentum.

James' preference for Ather Energy and Nazara Technologies also highlights the importance of looking beyond the benchmark index. Even while the Nifty remains trapped in consolidation, individual stocks with improving price structures and momentum may continue to present opportunities.

As always, the levels and stock views discussed are market opinions rather than guaranteed outcomes, and investors should consider their own risk tolerance before making investment decisions.