Sudeep Shah of SBI Securities believes the momentum in Bank Nifty remains strong, particularly led by private sector banks. "Given the current chart structure and improving momentum indicators, Bank Nifty is likely to continue its upward move and may test the 56,800 level in the near term with a potential extension toward 57,500," he said in an interview to Moneycontrol.
He recommended buying Mahindra and Mahindra, and Indus Towers for next week. "M&M has given a downward sloping trendline breakout along with robust volume, while Indus Towers has given a falling channel breakout on a daily scale supported by robust volume," said the Deputy Vice President and Head of Technical and Derivative Research at SBI Securities.
Further, he remains constructive on both Waaree Energies and Bharat Electronics at current levels, and bullish on both Bharti Airtel and MCX India, as their recent price action suggests that the uptrend is still in its early stages.
Do you expect the Nifty to surpass and sustain above previous week’s high of 25,222 in the coming week?
Over the past 28 trading sessions, the benchmark index Nifty has remained locked within a narrow range of 25,222 to 24,462. Interestingly, 16 of these sessions witnessed a gap-up or gap-down opening, underscoring the presence of heightened intraday volatility despite the broader index moving sideways. This choppy movement within a tight band has offered limited opportunities for directional trades, keeping traders on the edge.
However, bulls took charge in the final trading session of the week, helping Nifty close with weekly gains of 1.59%. With this strong performance, the index has decisively ended above the psychological milestone of 25,000. Heavyweight stocks, especially Reliance Industries and Bharti Airtel, were key drivers of the upmove. Notably, Nifty closed near the weekly high, further reinforcing bullish sentiment.
From a technical standpoint, the prolonged phase of consolidation has notably impacted key indicators. The upward slope of the short and medium-term moving averages has slowed down, reflecting a loss of momentum. Simultaneously, the daily RSI continues to move sideways, in line with the RSI range shift concept that suggests a lack of directional bias. Further, the trend strength indicator, i.e., ADX, is currently quoting near the 13 level, which was the lowest level since July 2024, which shows a lack of strength in either direction.
Moreover, the Bollinger bands on the daily chart have contracted significantly — a setup known in technical terms as a Bollinger Band Squeeze. This formation typically occurs when volatility drops to low levels and the price trades within compressed bands, often preceding a sharp breakout or breakdown.
Given these technical cues, a significant directional move in the Nifty could be on the horizon over the next few trading sessions, potentially breaking the current deadlock. Traders may consider staying alert for any price expansion outside the range to catch the emerging trend early.
Talking about crucial levels, the zone of 24,880-24,850 will act as immediate support for the index. While, on the upside, the zone of 25,200-25,250 will act as a crucial hurdle for the index. Any sustainable move above the 25,250 level will lead to resume its northward journey. In that case, it is likely to test the level of 25,500, followed by 25,700 in the short term.
Have you observed any recent changes in FII positioning or behaviour?
Yes. FIIs have turned buyers in the Indian market over the last four consecutive trading sessions. Notably, this also marks the fourth straight month of net buying, despite ongoing geopolitical tensions and global tariff concerns. While the buying volume remains lower compared to previous sell-offs, the shift in sentiment is clearly visible, indicating a gradual return of confidence.
What are your top two stock picks for the upcoming week?
Mahindra and Mahindra (M&M)
The Nifty Auto has been strongly outperformed frontline indices in the last week, and currently, it is on the verge of giving trendline breakout. M&M has given a downward sloping trendline breakout along with robust volume. The daily RSI (Relative Strength Index) is surged above 60 mark, and it is in rising mode. Hence, we recommend accumulating the stock in the zone of Rs 3,190-3,160 level with a stop-loss of Rs 3,060 level. On the upside, it is likely to test the level of 3,400 in the short term.
On Friday, the stock has given a falling channel breakout on a daily scale. This breakout is confirmed by robust volume. Currently, the stock is trading above its short and long-term moving averages. These averages are in rising mode, and they are in the desired sequence, which suggests the trend is strong. The momentum indicators also suggest strong bullish momentum in the stock. Hence, we recommend accumulating the stock in the zone of Rs 405-400 levels with a stop-loss of Rs 385 level. On the upside, it is likely to test the level of Rs 440 in the short term.
Are you a strong buyer in Waaree Energies and Bharat Electronics at current levels?
Yes, we remain constructive on both Waaree Energies and Bharat Electronics at current levels and believe they are well-positioned to extend their upward momentum in the near term.
Bharat Electronics (BEL) is trading at an all-time high, reflecting strong underlying strength. With all key moving averages aligned positively and momentum indicators continuing to point higher, the stock is clearly in a strong uptrend. The lack of historical resistance further supports the bullish outlook.
Waaree Energies, on the other hand, is showing signs of a potential breakout. It is currently hovering near a downward-sloping trendline on the daily chart, and a close above this trendline could trigger the next leg of the rally. Notably, the stock witnessed volumes above its 50-day average on Friday, suggesting smart money accumulation ahead of a possible breakout. A decisive move above the trendline could lead to significant upside in the short term.
Are you still bullish on Bharti Airtel and MCX India, given their recent sharp rallies following strong breakouts?
Yes, we remain bullish on both Bharti Airtel and MCX India, as their recent price action suggests that the uptrend is still in its early stages. Both stocks have delivered strong breakouts on the daily chart, supported by robust volumes—an indication of strong institutional participation and broad-based buying interest.
From a technical standpoint, the current chart structure, along with positive momentum indicators, reinforces the likelihood of continued strength. In both cases, price action is supported by rising moving averages and healthy consolidation prior to the breakout, which further validates the sustainability of the ongoing rallies. We expect both stocks to maintain their outperformance in the near term.
Do you believe momentum remains strong in the Bank Nifty, especially within the Private Bank Index, which has outperformed the PSU Bank Index?
Yes, we believe the momentum in Bank Nifty remains strong, particularly led by private sector banks, which have continued to outperform their PSU counterparts. The index recently found support near its 34-day EMA and rebounded, indicating buyers are defending key moving averages. On Friday, Bank Nifty broke out of a three-day consolidation phase and closed higher by 1.22% further confirming short-term strength.
Technically, the daily RSI has formed a base near the 50 mark and is now approaching the 60 zone with upward momentum signaling a strengthening bullish setup. The index is also trading above its key short and medium-term moving averages supporting the positive outlook.
Given the current chart structure and improving momentum indicators, Bank Nifty is likely to continue its upward move and may test the 56,800 level in the near term with a potential extension toward 57,500. On the downside, the 55,600–55,500 zone will act as a crucial support area.
Do you anticipate a flag breakout in the Nifty Auto Index sooner rather than later?
Yes, we do. The Nifty Auto Index is currently approaching a downward-sloping trendline resistance on the daily chart and appears poised for a breakout. The index is trading above both its short and long-term moving averages, indicating a strong underlying trend.
Moreover, the daily RSI is rising and is on the verge of crossing the 60 mark, which reflects improving bullish momentum. Given the constructive price setup and strengthening indicators, we believe the Nifty Auto Index is likely to witness an upside breakout soon, with auto stocks expected to outperform in the short term.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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