Chartist Talks: SBI Sec’s Sudeep Shah bullish on 4 stocks, but signals avoid for telecom stock, sees this bank at overbought zone after 81% rally

Bank Nifty is currently trading near its prior swing low, which raises the possibility of a double bottom formation. However, for this pattern to be validated, more price action and a confirmed breakout above the neckline would be essential.

Interestingly, the index is also hovering near an upward sloping trendline support, which lends additional technical strength to this zone. That said, confirmation is still pending, and traders should remain cautious until a clearer reversal signal emerges.

Adding to the uncertainty, Bank Nifty moved within a tight range of just 756 points last week — its narrowest weekly range since August 2024 — highlighting indecision and a lack of strong directional bias. On the weekly chart, the formation of a small-bodied bearish candle with a long upper shadow further signals selling pressure at higher levels, often associated with profit-booking or cautious sentiment.

Currently, the index is oscillating around its 20-day EMA, marking a crucial inflection zone. Momentum indicators are not offering strong cues either, with the daily RSI stuck in a sideways zone, reflecting a lack of conviction.

Going forward, 56,200–56,300 remains an important support zone, while the 57,100–57,200 area will act as a key resistance. A decisive breakout beyond this range — especially a move above the neckline if the double bottom develops — would pave the way for a stronger directional move, potentially confirming a bullish reversal.

Do you see a strong possibility of a bounce-back in the Nifty 50 after initial weakness next week?

The benchmark Nifty index spent the first four trading sessions of the week trapped in a tight 200-point range, reflecting the indecision among market participants. But on Friday, the calm broke. The index opened with a sharp gap down, slipped below its consolidation zone, and faced renewed selling pressure, signaling that sentiment is beginning to tilt in favor of the bears.

What’s more alarming is that Nifty has now slipped below its crucial 20-day EMA, which has also begun to slope downward — a classic sign of emerging weakness. The momentum indicators aren’t painting a comforting picture either. The daily RSI has given a bearish crossover and continues to head south, while the MACD histogram has flipped into negative territory. Collectively, these signals suggest that downside momentum may be gaining strength.

From a technical standpoint, immediate support now lies in the 24,900–24,850 zone, where the 50-day EMA is placed. A break below 24,850 could push the index toward the next key support at 24,550. On the flip side, a move above the 25,300–25,350 zone is required for bulls to regain control in the short term.

Amid this technical caution, macro and earnings uncertainties are only adding to investor anxiety. With tariff uncertainty rising globally and Q1 earnings just getting started—kicked off by TCS on Thursday—markets are entering a critical phase. Investors are now watching for signs of margin pressures, global demand outlooks, and forward guidance from corporates. In this tug-of-war between technical breakdowns and earnings expectations, a cautious and stock-specific approach may be the best strategy for now.

What are your top two buying ideas for the coming week, and what are the justifications behind those picks?

EID Parry

The stock has delivered a decisive breakout from its consolidation phase on the daily chart, signaling a fresh leg of the uptrend. What makes this breakout significant is the accompanying surge in volume, lending strong conviction to the move. Notably, the stock has been consistently outperforming the frontline indices over the past few trading sessions, highlighting growing investor interest and relative strength. As the stock is trading at an all-time high, all the moving averages and momentum-based setups are showing strong bullish momentum. Hence, we recommend accumulating the stock in the zone of Rs 1,155-1,145 level with a stop-loss of Rs 1,100 level. On the upside, it is likely to test the level of Rs 1,260 in the short term.

Prestige Estates Projects

The stock registered a swing high of Rs 1,761 on June 24, followed by a throwback phase that was accompanied by subdued volumes — a sign of healthy profit booking rather than trend reversal. Notably, the correction found support near the 34-day EMA. Post this pullback, the stock has resumed its upward journey, supported by a noticeable rise in volume, adding conviction to the ongoing rebound. Over the past few sessions, it has been outperforming the frontline indices, signaling renewed strength and relative leadership.

Momentum indicators are now turning increasingly positive. The daily RSI is comfortably placed in bullish territory, while other oscillators are also supporting the ongoing uptrend. The technical structure suggests that the stock may be gearing up for a fresh move higher in the short term. Hence, we recommend accumulating the stock in the zone of Rs 1,700-1,690 level with a stop-loss of Rs 1,630 level. On the upside, it is likely to test the level of Rs 1,820 in the short term.

Is this a good level to consider buying Bharti Airtel, which has reached the swing high of May?

The stock marked a high of Rs 2,045 on July 02 and thereafter started witnessing profit booking. Since the last two trading sessions, the stock has witnessed a correction along with a relatively higher volume. Also, it has slipped below the 20-day EMA level, which is a bearish sign. Hence, we recommend avoiding Bharti Airtel for now.

Do you think RBL Bank is on the verge of a rounding bottom breakout on the weekly chart, or is it currently looking oversold?

Yes, on the weekly chart, RBL Bank appears to be on the verge of a Rounding Bottom breakout — a bullish continuation pattern that typically indicates a shift from accumulation to a sustained uptrend. The price structure suggests growing strength, and a breakout above the neckline could confirm a long-term trend reversal.

However, it's important to note that over the past 24 weeks, the stock has already rallied over 81%, indicating a sharp and extended move. As a result, the weekly RSI is currently hovering around the 80 mark, which falls into the extreme overbought territory as per RSI range shift principles.

While the broader structure remains positive, the elevated RSI suggests that a near-term pause or consolidation cannot be ruled out before the stock attempts a confirmed breakout. Traders should watch for volume confirmation and price stability near the breakout zone for higher conviction.

Is Dabur a compelling buy at current levels, considering the chart pattern and momentum indicators?

Dabur has been showing strong relative strength, consistently outperforming the frontline indices over the past few sessions. The recent price action is backed by robust volumes and strong bullish momentum, suggesting growing investor interest and positive sentiment around the stock.

However, from a momentum standpoint, there’s a need for caution. The daily RSI is currently hovering around the 80 mark, which signals an overbought condition as per RSI range shift principles. This suggests that while the broader trend remains positive, the stock may be due for a short-term pause or consolidation before it resumes its next leg of the uptrend.

In summary, while Dabur continues to show promise, fresh entries may be better timed after a mild pullback or consolidation, offering a more favourable risk-reward setup.

What is your view on SBFC Finance and Ramco Cements, both of which had a strong rally in the past week?

We maintain a bullish view on both SBFC Finance and Ramco Cements, as both stocks have delivered decisive breakouts backed by robust volumes — a strong technical confirmation of trend strength.

In both cases, the price action is well-supported by rising moving averages, and momentum-based indicators are firmly in bullish territory, signaling that the underlying trend remains healthy and intact.

The recent rally suggests renewed buying interest and strong participation from market participants. As long as the breakout levels are protected, both stocks are well-positioned to extend their upward momentum 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.