Sudeep Shah, the Head - Technical and Derivatives Research at SBI Securities, believes the Nifty IT index appears well-positioned to surpass its June swing high in December.
"The ratio chart of Nifty IT against the benchmark Nifty is now forming a clear pattern of higher tops and higher bottoms, signalling a phase of outperformance within the broader market. Additionally, momentum indicators further support this bullish outlook," he said in an interview with Moneycontrol.
He is bullish on LTIMindtree and Canara Bank for next week. "With momentum indicators improving and price action remaining firm, LTIMindtree appears well-positioned for a fresh upside move, while the ratio chart of Canara Bank/Nifty PSU Bank has broken out of consolidation, signalling clear outperformance against its sector index and hinting at continued relative strength," he said.
Do you expect the Nifty 50 to continue its larger-degree higher-high, higher-low structure and reach the 27,000 level in December?
Nifty has entered a breakout phase after finally surpassing its 14-month resistance band and marking a fresh all-time high. The index also wrapped up the week and month at its highest-ever closing levels, signalling strong bullish control. Notably, the optimism wasn’t restricted to the benchmark — Nifty Bank, Nifty Private Bank, Nifty Financial Services, Nifty Auto and Nifty Infra also registered new lifetime highs, emphasising continued leadership from key sectors.
Despite this strong headline performance, the broader market is yet to fully participate. The Nifty Midcap 100 scaled a new peak, indicating ongoing institutional appetite for quality midcaps. However, the Nifty Smallcap 100 declined for the second straight week and remains below its 20-, 50- and 100-day EMAs — a sign of selective strength and caution in the smallest part of the market.
This brings us to the critical question: will broader indices catch up? Based on current technical setups, a broad-based breakout in smallcaps appears less likely in the immediate term. The upside, therefore, is expected to remain stock-specific, with sector rotation continuing to drive incremental gains.
Looking ahead, we anticipate Nifty to maintain its upward drive and head toward 26,500 initially, followed by 26,800. On the downside, the 20-day EMA region of 25,950–25,900 should act as a strong near-term support zone in case of a pullback.
Given the improving technical structure and momentum indicators, do you see the Nifty IT index surpassing its June swing high in December?
Yes, the Nifty IT index appears well-positioned to surpass its June swing high in December. The ratio chart of Nifty IT against the benchmark Nifty is now forming a clear pattern of higher tops and higher bottoms, signalling a phase of outperformance within the broader market. Additionally, the index is trading comfortably above its 200-day EMA, reinforcing the ongoing strength in its structure.
Momentum indicators further support this bullish outlook. While the daily RSI continues to hold in bullish territory, the weekly RSI is also on the verge of pushing decisively above the 60 mark, a key trigger that typically reflects building upside momentum. Together, these factors point towards a continuation of the current uptrend, improving the probability of the index crossing its June peak in the coming month.
What is your target for the Bank Nifty in December? Have you taken a long position in the index?
Bank Nifty continues to command leadership with its remarkable outperformance. The index hit a new all-time high last week and logged its fourth consecutive weekly gain, reinforcing the strength of the ongoing rally in banking stocks.
On the technical front, momentum remains exceptionally strong. RSI readings across major timeframes stay firmly in the bullish zone and continue to climb, indicating persistent buying interest. The index has also managed a weekly close above the upper Bollinger Band, an uncommon but powerful sign of strong upside momentum. Other indicators align with this bullish narrative, leaving little doubt about the underlying strength.
Moving forward, Bank Nifty looks set to continue its upward march, with immediate targets of 60,300 and then 61,000. On declines, the 58,800–58,700 region — coinciding with the 20-day EMA — is likely to act as key support. Given the favourable technical structure, Bank Nifty should remain one of the main drivers of the market’s near-term uptrend.
Which two stocks would you prefer to bet on for December?
LTIMindtree has been moving steadily higher after taking strong support in the 4,950–5,000 zone, maintaining a higher-high, higher-low structure with the 20-day EMA acting as a dynamic support. The RSI, which briefly dipped below 60, has turned back up, indicating renewed bullish momentum. Additionally, the ADX line has started rising, signalling strengthening trend intensity.
The stock has now closed near its previous swing high, which also aligns with the upper Bollinger Band, reflecting growing upward momentum. With momentum indicators improving and price action remaining firm, the stock appears well-positioned for a fresh upside move. Hence, we recommend accumulating the stock in the zone of Rs 6,100-6,070 with a stop-loss of Rs 5,910. On the upside, it is likely to test the level of Rs 6,520 in the short term.
Canara Bank has rallied strongly since its downward-sloping channel breakout in mid-September, maintaining a healthy higher-high, higher-low structure. The ratio chart of Canara Bank/Nifty PSU Bank has also broken out of consolidation, signalling clear outperformance against its sector index and hinting at continued relative strength.
The stock currently trades nearly 5% above its 20-day EMA, indicating strong short-term bullish momentum and sustained buying interest. With a robust price structure, improving relative strength, and momentum firmly in favour of the bulls, the stock is well-positioned to extend its upward trajectory in the coming sessions. Hence, we recommend accumulating the stock in the zone of Rs 152-150 with a stop-loss of Rs 146. On the upside, it is likely to test the level of Rs 164 in the short term.
Are you highly bullish on Mahindra and Mahindra, which has been consolidating near its record-high zone?
M&M continues to display resilience near its record-high zone. After spending three sessions around the 20-day EMA, the stock attracted strong volume-backed buying on Friday, reaffirming the strength of its short-term uptrend.
The ADX shows widening DI lines, pointing to firming directional momentum, while the RSI staying above 60 highlights sustained bullishness. With momentum indicators turning favourable and buyers consistently defending key support levels, the stock remains positioned for potential upside in the near term.
What is your view on Laurus Labs after its more than 5 percent rally last week?
Laurus Labs continues to move in a higher high–higher low formation. Last week, the stock hovered near its 20-day EMA in the Rs 970-994 range before breaking out on Thursday, followed by a strong follow-through rally on Friday. RSI has surged from 55 to nearly 70, signalling strengthening bullish momentum.
With Friday’s close above the upper Bollinger Band, the stock reflects strong upside volatility and aggressive buying interest. Additionally, the widening DI lines on the ADX indicate improving trend strength. Considering the indicator alignment and constructive price action, Laurus Labs appears poised to extend its northward trajectory in the near term.
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.
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