Chartist Talk: Technical indicators signal strong bullish momentum in Nifty Pharma, says Sudeep Shah, bets on these 2 stocks for next week

Muthoot Finance has rallied sharply after its strong Q2 earnings, supported by record AUM growth, upgraded guidance, and strong demand for gold loans amid rising gold prices. Technically, the stock was consolidating in a Rs 3,378–3,089 range since mid-October with narrowing Bollinger Bands, before breaking out on November 11.

This week’s strong follow-through buying, backed by rising volumes, confirms renewed momentum. RSI has jumped to 80.44 — the highest since June 2025, indicating overbought conditions, so minor profit booking can’t be ruled out before a fresh upside rally.

Do you foresee a fresh leg of upmove in Vodafone Idea after its horizontal trendline breakout and 14 percent surge last week?

Vodafone Idea has indeed shown strong follow-through after its horizontal trendline breakout, with the price moving in a steady higher-high higher-low structure. The stock witnessed a sharp upswing from the start of November after finding strong support at the 50-day EMA.

Momentum indicators are supportive. RSI is in bullish territory, ADX is strengthening, and the MACD slope is trending upwards. This combination of price action and momentum signals indicates that the stock may still have room for further upside. That said, traders should maintain a strict stop-loss. Vodafone Idea is highly sensitive to news flow, and any negative development can quickly erase recent gains.

Are you confident that the Nifty 50 can move beyond the 26,100 hurdle (the October high) next week?

The benchmark index Nifty posted a strong rebound after taking solid support in the 25,300–25,330 region, which coincides with the 50-day EMA and the 50% Fibonacci retracement of the prior upswing from 24,587 to 26,104. This technical confluence acted as a firm base and triggered a sharp bounce. From the recent low of 25,318, the index has rallied nearly 700 points over the past five sessions.

On Friday, Nifty opened with a gap down and largely moved sideways through the day, but a sharp late-session recovery shifted the sentiment. The market got an additional lift as the NDA secured a clear lead in the Bihar elections. The index closed the week above 25,900 with a 1.64% gain, forming a bullish weekly candle. Adding to the strength, the Nifty Midcap 100 and Bank Nifty advanced to fresh all-time highs during the week.

Technically, Nifty is trading well above all its key moving averages, which are trending upward—indicating a sustained bullish setup. Both daily and weekly RSI remain in positive zones, reinforcing prospects of an extended upmove. We expect the index to continue its northbound trajectory and potentially test 26,200, followed by 26,500, in the near term.

On the downside, the 20-day EMA zone of 25,700–25,650 remains a crucial support band. A breakdown below this region could lead to profit-booking, but as long as it holds, the overall bias stays constructive. Sector-wise, leadership is likely to emerge from Nifty Private Banks, PSU Banks, Financial Services, Defence, Automobiles, Oil & Gas, Capital Markets, Infrastructure, and Pharma.

Do you expect the Bank Nifty to defend the 58,600 support in the upcoming week and advance beyond 59,000?

After moving sideways for three straight weeks, Bank Nifty has finally staged a breakout, delivering a strong upside move and registering a new all-time high. The index closed the week above the 58,500 mark, forming a large bullish candle on the weekly chart—clearly reflecting renewed strength in banking stocks.

At present, the index is trading at uncharted levels, with all key moving averages trending higher, confirming a solid bullish structure. Momentum indicators also support this outlook: both daily and weekly RSI remain in positive territory, and the weekly MACD histogram indicates strengthening upward momentum, adding confidence to the breakout.

Looking ahead, the 58,700–58,800 range will be the immediate resistance zone. A decisive move above 58,800 could open the door for a swift rally toward 59,500, and subsequently 60,200 in the near term. On the downside, the 20-day EMA zone around 57,800–57,700 should act as a strong support base, keeping the broader bias bullish as long as this level is defended.

What are your top two stock picks for next week?

Axis Bank

Axis Bank has delivered a strong bullish signal with a decisive breakout above its downward sloping trendline on the daily chart. After consolidating for five sessions near the crucial 20-day EMA zone of Rs 1,215–1,220, the stock respected this area as a solid demand base before surging higher today. Momentum is strengthening, with RSI moving steadily higher and closing above 60, indicating rising bullish dominance.

The stock has also closed above the Bollinger Band midline, signalling a shift in control from sellers to buyers and suggesting that price is now gravitating toward the upper band. Overall, the setup favours continued upside. Hence, we recommend accumulating the stock in the zone of Rs 1,245-1,235 with a stop-loss of Rs 1,200. On the upside, it is likely to test the level of Rs 1,330 in the short term.

Garden Reach Shipbuilders and Engineers

GRSE has broken out of a tight Rs 2,516–2,793 consolidation range that had been in place since early October. During this period, the Bollinger Band had narrowed, signaling low volatility and an absence of directional momentum. The stock finally broke out of the range on November 11, and Friday’s strong follow-through move, supported by rising volumes, confirms renewed buying interest.

Importantly, the previously contracted bands have now begun to widen, indicating the start of a fresh volatility expansion typically associated with trending moves. ADX is also turning higher, signalling strengthening trend intensity. Together, these factors point toward a robust bullish phase unfolding in GRSE. Hence, we recommend accumulating the stock in the zone of Rs 2,910-2,890 with a stop-loss of Rs 2,810. On the upside, it is likely to test the level of Rs 3,100 in the short term.

Do you expect a breakout above the resistance trendline in the Nifty Pharma index?

Yes, the Nifty Pharma index is on the verge of giving a downward-sloping trendline breakout on a weekly scale. Currently, the index is trading above its crucial moving averages, and these averages are on a rising trajectory. The daily RSI has given a downward sloping trendline breakout, and it is quoting above the 60 mark, which indicates strong momentum. Other technical indicators are also suggesting strong bullish momentum in the index.

Hence, we believe the index is likely to give the trendline breakout in the next couple of trading sessions.

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