Chartist Talk: 25,300 key for Nifty downside, but momentum could lift these two large caps, says Sudeep Shah

Sudeep Shah is the Head - Technical and Derivatives Research at SBI Securities

• Momentum remains decisively bearish on Nifty IT, with no early signs of a turnaround. Nifty below 25,300 could see more downside
• Eicher Motors, Bajaj Finance show strong momentum

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According to Sudeep Shah, the Head - Technical and Derivatives Research at SBI Securities, the 25,350–25,300 zone is expected to serve as immediate support for the Nifty 50. “A decisive breach below 25,300 may open the door for further downside towards 25,100, followed by the key 24,900 level,” he said in an interview with Moneycontrol.

He believes momentum suggests the bull run can extend in Bajaj Finance and Eicher Motors, supported by strong technical signals.

“Bajaj Finance has broken above a downward sloping trendline on the daily chart, indicating a shift from correction to a fresh uptrend. Eicher Motors has shown a post-earnings breakout above its prior swing high, followed by strong follow-through and rising volumes,” he said.

Q: Do you think the worst is almost over for the Nifty IT index, as it has once again reached the lows from April 2025 and June 2024 due to renewed AI disruption fears?

Nifty IT came under intense selling pressure last week, plunging over 8% and extending its month-to-date losses beyond 14%—one of the sharpest drawdowns in recent times. The index has broken below critical support levels, reflecting a clear weakening of the underlying trend. With moving averages rolling over and momentum indicators deep in negative territory, the technical setup suggests that weakness could continue in the near term.

Notably, every constituent within the Nifty IT index is trading below its major moving averages, reinforcing the prevailing downtrend. Momentum remains decisively bearish, with no early signs of a turnaround. In this environment, bottom fishing appears premature unless the charts begin to show evidence of stabilization.

With bears back in control, do you expect the Nifty 50 to test the 200-DMA next week and close the bullish gap from February 3, which was created by the trade deal announcement?

Last week, the benchmark Nifty once again struggled to hold above the crucial 26,000 psychological barrier, leading to a sharp spell of profit booking. After scaling a high of 26,009, the index tumbled nearly 550 points over the final two sessions — a swift decline that clearly indicates supply pressure at elevated levels. While the correction may seem routine at first glance, the factors driving it suggest a deeper undercurrent at play.

Technically, the IT pack continues to reflect pronounced weakness. All index constituents are trading below their key moving averages, which are aligned in a downward slope. Momentum indicators remain firmly in bearish territory with no visible signs of a turnaround. In such a backdrop, bottom fishing appears risky unless the technical structure shows early evidence of stabilization.

As for Nifty, the index has now slipped below its 20-day, 50-day, and 100-day EMAs, signaling erosion in both short- and medium-term trend strength. Notably, the 20-day and 50-day EMAs have begun to slope downward — often an early indication of strengthening bearish momentum. Adding to the caution, the daily RSI failed to cross back above the 60 mark during the recent bounce and has now moved below its 9-day average, suggesting that upside traction could remain limited in the near term.

Looking ahead, the 25,350–25,300 zone is expected to serve as immediate support. A decisive breach below 25,300 may open the door for further downside towards 25,100, followed by the key 24,900 level. On the upside, the 50-day EMA band around 25,650–25,700 is likely to act as a strong resistance barrier.

Will the Bank Nifty be able to defend the 60,000 level next week, considering it did not experience the same major downtrend as the Nifty, according to the charts?

The banking benchmark, Bank Nifty, outperformed the broader frontline indices last week, ending the week largely unchanged despite heightened volatility across the market. For the first four sessions, the index traded within a narrow 431-point range, reflecting a clear consolidation phase. This calm spell, however, was broken on Friday as the index slipped below the established range, hinting at early signs of weakness after several subdued sessions.

Despite Friday’s dip, Bank Nifty continues to hold above its key moving averages, all of which maintain an upward slope—indicating that the overall trend structure remains positive. That said, momentum indicators and oscillators are signalling a neutral-to-sideways bias, implying that the index could extend its consolidation before committing to a decisive directional move.

In the near term, the 20-day EMA zone of 60,000–59,900 is likely to act as immediate support. A sustained break below 59,900 could open the door for further downside towards the 50-day EMA, currently positioned near 59,467. On the upside, the 60,600–60,700 region remains a critical resistance band, and only a convincing close above this zone may revive bullish momentum and set the stage for the next leg higher.

Do you expect the bull run to continue in Bajaj Finance and Eicher Motors, which rallied 4 percent and 12 percent, respectively, during the week?

Yes, momentum suggests the bull run can extend in both stocks, supported by strong technical signals.

In Bajaj Finance, price has broken above a downward sloping trendline on the daily chart, indicating a shift from correction to a fresh uptrend. The weekly three-outside-up pattern signals a bullish reversal. RSI has rebounded sharply from 39 to 56, while DI+ crossing above DI? in ADX reflects improving directional strength. Contracting red MACD histogram bars further show selling pressure is fading.

Eicher Motors has shown a post-earnings breakout above its prior swing high, followed by strong follow-through and rising volumes. Expanding MACD green histogram bars confirm bullish momentum, and repeated closes above the upper Bollinger Band in the last three sessions point to a strong trending phase. Overall, both charts favor continuation, though short-term pullbacks are possible after sharp weekly gains.

Which two stocks would you recommend buying during the current fall, for the upcoming week?

LT Foods

LT Foods gave a downward sloping trendline breakout on February 3 but initially lacked follow-through. The stock later retested the breakout trendline zone and bounced strongly, confirming that the earlier resistance has now turned into a reliable support zone with fresh buying interest emerging around these levels.

MACD remains well above both the signal line and the zero line, reflecting a firm bullish bias and sustained positive momentum. RSI is steadily rising, indicating improving strength.

Price action is also riding near the upper Bollinger Band, a behavior commonly seen in strong, trending up moves, suggesting the upward trajectory may continue. Hence, we recommend accumulating the stock in the zone of Rs 428-433 with a stop-loss of Rs 410. On the upside, it is likely to test the level of Rs 460 in the short term.

Max Financial Services

Max Financial Services has delivered a horizontal trendline breakout on the daily chart, backed by steady follow-through and rising volumes, which strengthens the validity of the move. The stock has closed above the upper Bollinger Band for two straight sessions. This typically indicates strong momentum and volatility expansion, often seen during powerful trending phases rather than immediate reversals.

Rising MACD histogram bars point to accelerating bullish momentum. Additionally, the ratio line in the Financial Services/Nifty ratio chart is trending higher, signaling relative outperformance of the sector relative to Nifty, and MFSL is well placed to potentially lead the rally in the coming sessions. Hence, we recommend accumulating the stock in the zone of Rs 1,830-1,810 with a stop-loss of Rs 1,750. On the upside, it is likely to test the level of Rs 1,960 in the short term.

Are you maintaining a bullish view on Piramal Pharma, and do you see a consolidation breakout in CG Consumer Industrial Solutions next week?

It is advisable to stay selective rather than outright bullish on both at current levels.

In Piramal Pharma, the stock has been consolidating in the Rs 155–168 range for about nine sessions after a prolonged downtrend since December 2024. The recent pullback from lower levels is constructive, but the broader lower-high–lower-low structure is still intact. Unless this gets negated, trend strength remains questionable. The Rs 180–185 zone is a key resistance band. Only a strong breakout above this area would revive a firm bullish view.

CG Power and Industrial Solutions is also stuck in a tight Rs 651–695 range after the early-February gap-up and brief follow-through. RSI has plateaued and ADX has eased, signaling low volatility. A decisive move above Rs 700–705 is needed to confirm a consolidation breakout next week.