Chartist Talk: Avoid bottom-fishing in IndiGo after 9% slide, says Sudeep Shah; recommends 2 stocks for next week

The Nifty 50 opened in December on a strong footing, marking a new record high on Day 1 before slipping into a brief, orderly correction. This pullback halted precisely around the 20-day EMA — a zone that also aligns with the lower boundary of the ongoing rising channel, forming a strong confluence of support. From this base, the index recovered smartly and closed the week near 26,200, almost unchanged at 0.06 percent.

A notable feature through the week has been continued leadership from heavyweights in Banking and IT. Their relative strength has kept the frontline indices resilient and limited the depth of corrections, even though broader markets remain less convincing. The Nifty Smallcap 100 still trades below its 200-day EMA, signalling caution beneath the surface.

Going forward, the technical structure supports a positive bias. As long as Nifty holds above the 25,950–25,900 support band, the index remains positioned for an upward push toward 26,350, with 26,500 emerging as the next key target zone. Dips toward support are likely to be shallow and short-lived.

After taking support at the 20-DEMA, the Bank Nifty showed a healthy recovery. Do you expect the index to make a new high next week?

Bank Nifty recently hit a record high before entering a mild retracement phase. The decline found firm support at the 20-day EMA, reinforcing the underlying bullish trend. Following the RBI’s 25-bps rate cut, the index rebounded sharply, reaffirming strong momentum.

On the weekly chart, Bank Nifty has formed a small-bodied candle with a lower shadow, indicating active buying at declines. The RSI, which held near 61 during the pullback, has now bounced above its 9-day average, validating bullish momentum in line with the RSI range-shift behaviour.

Overall, the chart structure remains constructive. The index appears poised to extend its upward trajectory toward 60,400, with potential to move to 61,000 if buying pressure sustains. Immediate support remains strong at 59,200–59,100 and should cushion any temporary dips.

Is it the right time to accumulate InterGlobe Aviation after the recent sharp correction, or should one stay away from the stock?

InterGlobe Aviation (IndiGo) encountered stiff resistance at Rs 5,950–5,960 and reversed sharply, breaking below all key short- and medium-term moving averages — the 20, 50, 100, and 200 DEMAs. This breakdown confirms near-term trend weakness. The RSI has slipped to 30, signalling strong bearish momentum, while the DI– crossing above DI+ on the ADX suggests strengthening downside pressure.

The MACD has also dipped below both the signal line and the zero line, accompanied by rising red histogram bars, reinforcing the negative setup. At this stage, it is prudent to avoid bottom-fishing and stay away until the stock forms a clear base.

Are you a buyer in Shriram Finance after Friday’s rally following the sharp correction in the recent past?

Shriram Finance posted a strong rebound on December 5 following the RBI’s rate cut. The stock has protected its 20-EMA for three sessions, highlighting steady accumulation at lower levels. On the ADX, the previously converging DI lines have begun to widen again, indicating re-emerging bullish strength.

A close above the mid-line of the Bollinger Band framework suggests a shift toward the upper band, supporting a positive momentum transition. With RSI bouncing sharply from the 60 region, indicators collectively point to an improving upward bias. Overall, the stock looks positioned for further upside.

What are your top two stock picks for next week?

Cholamandalam Investment and Finance Company

Cholamandalam Investment has staged a strong rebound from its 50-day EMA near Rs 1,670. Despite briefly slipping below this average in late November, the stock recovered swiftly, with sentiment improving after the RBI rate cut.

A DI+ crossover above DI– on the ADX signals a strengthening bullish tone, while RSI rising from 45 to 56 reflects improving momentum. Accumulate in the Rs 1,730–1,720 zone with a stop-loss at Rs 1,675. The near-term upside target is Rs 1,850.

PB Fintech

PB Fintech remains in a strong uptrend, forming consistent higher highs and higher lows. The breakout above Rs 1,860–1,890 — a multi-week resistance zone — has reinforced the bullish structure.

RSI above 60, widening DI lines on the ADX, and expanding MACD histogram bars all point toward strengthening momentum. Accumulate at Rs 1,895–1,875 with a stop-loss at Rs 1,830 for an upside target of Rs 2,020.

Is it the right time to buy Indus Towers?

Indus Towers traded in a tight Rs 395–413 corridor since mid-November, consistently holding above the 20-day EMA — a clear sign of buying interest. On December 5, the stock broke out above this range with a strong bullish candle.

The RSI has moved above 60 on both daily and weekly charts, signalling firm momentum. Weakening bearish MACD histograms point to a possible bullish crossover. With a clean breakout and strengthening indicators, the stock is well-placed for further near-term gains.

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