Chartist Talk: Sudeep Shah adds to BSE, CCL Products; names two picks for next week, sees strong Nifty support at 25,300

The benchmark index Nifty witnessed a robust symmetrical triangle breakout in October, following which it maintained a steady upward momentum, inching closer to its all-time high. However, after displaying impressive strength initially, the index found it difficult to breach its record peak, leading to a phase of swift profit-booking. From the recent top of 26,104, Nifty corrected nearly 800 points over 10 trading sessions, indicating short-term exhaustion after an extended upmove.

Interestingly, Friday’s trading session proved to be a crucial technical juncture. The index managed to retest the breakout zone, which coincides with the 50-day Exponential Moving Average (EMA) — a widely tracked dynamic support during trending phases. The sharp rebound from this confluence zone suggests renewed buying interest, reaffirming the underlying strength of the ongoing uptrend.

Looking ahead, the 25,300–25,250 range is expected to serve as a strong support zone for the Nifty index. This area represents not only the recent breakout retest but also aligns with the 50-day EMA, enhancing its technical importance. On the higher side, the 25,650–25,700 band will act as an immediate resistance zone. A decisive close above 25,700 could reignite bullish momentum, paving the way for an advance towards 26,000 and subsequently 26,300 in the short term.

Market participants should keep a close watch on these key price levels, as a clear breakout or breakdown could dictate the next directional trend for the index.

Which two stocks would you prefer to bet on for the coming week?

Bank of India

The stock has given a consolidation breakout on a daily scale, along with relatively higher volume. As the stock is trading at a 52-week high, all the moving averages and momentum-based indicators are suggesting strong bullish momentum. The daily RSI and MACD suggest a pickup in upside momentum. Hence, we recommend accumulating the stock in the zone of Rs 145-143 levels with a stop-loss of Rs 138. On the upside, it is likely to test the level of Rs 155 in the short term.

Radico Khaitan

The stock has recently taken support near its 20-day EMA level and thereafter witnessed a smart rebound. The reversal from the support zone is confirmed by robust volume. Interestingly, the daily RSI has taken support near the 60 level and witnessed a rebound, which indicates a range shift as per RSI range shift rules. Further, the MACD histogram turned bullish on the daily chart. Hence, we recommend accumulating the stock in the zone of Rs 3,320-3,300 levels with the stop-loss of Rs 3,190. On the upside, it is likely to test the level of Rs 3,600 in the short term.

Do you believe the Bank Nifty is better positioned than the Nifty 50 and could potentially lead the broader index from here?

The banking benchmark index, Bank Nifty, has maintained its status as the standout performer on Dalal Street, consistently outperforming the broader market over recent months. Even in the past week—when the Nifty index declined by nearly 1 percent—Bank Nifty managed to end in positive territory, extending its relative outperformance and reaffirming its leadership position within the overall market trend.

Interestingly, the Bank Nifty-to-Nifty ratio has surged to a 68-day high, highlighting the sector’s strong relative momentum. The ratio continues to form higher highs and higher lows, a classic indication of sectoral strength and persistent buying interest in major banking counters.

On the technical front, the index remains well above its key moving averages, emphasizing the ongoing bullish sentiment. The daily RSI has once again crossed the 60 mark and is moving upward, suggesting that momentum is gradually picking up again following a brief consolidation period.

Looking ahead, the 20-day EMA zone between 57,500 and 57,400 is expected to act as a key support area, absorbing short-term declines. Conversely, the 58,200–58,300 zone is seen as a critical resistance level. A strong close above 58,300 could open the doors for a fresh rally, potentially taking the index towards 59,000, and even 59,600 in the near term.

In summary, as long as Bank Nifty continues to protect its short-term supports and sustain leadership on the ratio chart, overall market sentiment is likely to stay constructive—with banking stocks once again steering the broader market’s direction.

Are you turning more optimistic on L&T Finance, which has been maintaining a higher highs–higher lows formation for quite some time now?

Yes, we remain optimistic on L&T Finance as the overall trend continues to exhibit strength, maintaining its higher highs–higher lows formation. However, after the sharp 10 percent rally on Friday that pushed the stock into the overbought zone, a brief phase of consolidation cannot be ruled out before the next leg of the upward move resumes.

Are you adding to your positions in BSE and CCL Products?

Yes, we are adding to our positions in both BSE and CCL Products. Both stocks have given a consolidation breakout on the daily scale, supported by robust volumes. Moreover, momentum indicators and oscillators are signalling strong bullish undertones, suggesting the potential for further upside in the near term.

Are you bullish on the entire PSU banking space or only selective stocks within the sector?

Nifty PSU Bank has been strongly outperforming the frontline indices. From the PSU space, Bank of Baroda, Canara Bank, PNB, Bank of India, and Indian Bank are looking good.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.