The Nifty may be setting up for a short-term rebound after its recent slide pushed momentum indicators close to oversold territory, while battered IT stocks are also showing early signs of a pullback, according to Anand James, Chief Market Strategist at Geojit Investments. James sees 23,720 as the initial upside level for the Nifty, even as a break below the 23,260–23,000 zone could reopen deeper downside risks. In IT, easing momentum pressure and improving derivatives positioning suggest the sector could attempt a recovery towards 29,300–30,200.Edited excerpts from a chat:Nifty lost around 2% over the past week. What does the weekly chart tell you? Is this still a correction within a larger range, or has the index entered a deeper downtrend? What are the key levels to watch next?Nifty continues to give the feeling of a range trading market, primarily because momentum has been absent on either side. This has reflected in VIX, which continues to be not far from record lows. In fact, all hopes of a recovery or to see Nifty’s laboured swings as part of a consolidation phase, were first thwarted when the 20 dma rejected the advance in mid Aug which subsequently led Nifty to fall off the rising trendline in late Aug. Since then Nifty has been systematically edging down. But, now that oscillators are near oversold territory, a mean reversion move is likely aiming at 23720 initially. Alternatively, inability to clear 23515 or a direct fall past the 23260-23000 region could bring 23300-21800 into the radar.Read more: ETMarkets Smart Talk| With 87.7% of F&O traders losing money, why systematic trading is becoming more relevant for retail investors, says Prashant ShahIT was the clear casualty of the week. After this steep fall, are Infosys, TCS, HCLTech and Tech Mahindra technically oversold enough for a rebound, or do the charts suggest another leg lower?The sharp correction in the IT pack has pushed the sector close to an important technical support zone, increasing the likelihood of a near-term pullback rather than an immediate continuation of the downtrend. The Nifty IT Index is currently trading around the 50% Fibonacci retracement of the July-August rally, while the RSI has entered the oversold region and the MACD histogram is beginning to flatten, suggesting that downside momentum is gradually easing.Derivative positioning further supports the possibility of a rebound. ITM and OTM call strikes across major constituents such as Infosys, TCS, HCLTech and Tech Mahindra have witnessed fresh longs or short covering, while ITM put strikes have seen long unwinding. Additionally, nearly 70% of IT stock futures recorded fresh long positions on Friday, indicating attempts to build a base.While a pullback towards 29,300 and 30,200 cannot be ruled out, the broader trend would remain vulnerable only if the index breaks below the key support of 28,450 opening door for 28,100-28000 levels.With stocks such as Godrej Properties, Lodha, DLF and Oberoi Realty under pressure, has the realty sector's medium-term technical structure been damaged or is this still a buy-on-dips correction?The recent correction in realty stocks appears more than just a routine pullback, with the sector's near-term technical setup turning increasingly cautious. The Nifty Realty Index failed near the upper boundary of a downward-sloping channel and is now weakening toward key supports. Momentum indicators are also deteriorating, with the RSI slipping below its moving average and the weekly MACD nearing a bearish crossover, suggesting downside risks remain elevated.Derivative positioning reinforces this view. Traders continue to maintain a bearish stance, with nearly 70% of OTM put strikes witnessing fresh long additions and around 80% of OTM call strikes seeing short build-up, both on Friday and on a weekly basis.While the daily RSI is approaching oversold territory, which could trigger a short-term relief rally, any rebound towards the 870 zone is likely to attract fresh selling. Unless the index reclaims 912, the bias remains negative, with supports placed at 814 initially and 790-780 on a breakdown. Overall, the medium-term structure has weakened and further downside cannot be ruled out.Read more: Commodity Talk | Gold isn't the only story: Why copper, energy and other commodities are gaining portfolio relevance, says Dr. Joseph ThomasWires and cable stocks have witnessed one of the sharpest sector-specific selloffs but we saw Finolex Cables rebounding 17%. Purely from a technical lens, how do you see this upmove and whether more steam is left?Yes, despite a long legged doji appearing on Friday casting doubts on the continuity of uptrend, oscillators continue to be in a healthy space, allowing more upsides. Moreover, 2024’s peaks are still a reasonable distance away, allowing resumption of uptrend, even if a consolidation unfolds. Meanwile, 1360 could be used as a downside marker.Give us your top picks for the week.FIVESTAR (LTP: 551)View: BuyTarget: 575-590SL: 535FIVESTAR has turned technically strong after breaking above a parallel consolidation range, signaling the continuation of its ongoing uptrend. The move is backed by a noticeable pickup in volumes, reflecting strong market participation. The stock has also reclaimed its Supertrend resistance, while the MACD has generated a bullish crossover, indicating improving momentum.The Point & Figure chart has witnessed a fresh bullish breakout, with the stock reversing higher after a brief consolidation phase. The formation of a new column of Xs indicates renewed demand and suggests the broader uptrend remains intact.The breakout above the recent trading range suggests fresh buying interest and improves the probability of a move towards higher levels over the coming weeks. As long as the stock sustains above 535, the bullish setup remains intact. Traders may consider accumulating the stock at current levels for an upside target of 575-590 over the next few weeks.BSOFT (LTP: 281)View: BuyTarget: 298SL: 274Birlasoft is showing early signs of a recovery after finding support near a key horizontal demand zone around 275. The stock recently formed a pin-bar doji candle near support, indicating rejection of lower levels and the emergence of buying interest. Momentum indicators are also turning supportive, with MACD histograms printing exhaustion candles, suggesting that the recent selling pressure may be fading.The rebound has been accompanied by a multi-week volume breakout, highlighting increased participation and improving conviction among buyers. While the stock remains in a recovery phase, the stabilization near support and improving momentum setup favor a pullback rally over the next few weeks.As long as BSOFT holds above 274, the near-term outlook remains positive and expect an upside move towards 298 over the coming weeks.