Nifty 50 Holds Bullish Bias Above Key Support
Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, stated that the Nifty 50 index is likely to remain positive as long as it holds above the crucial 24,800 support level. In an interview with Moneycontrol, Shah noted that the recent consolidation following a sharp rally is a healthy pause rather than a sign of trend reversal.
The index recently broke out of a downward-sloping trendline on the weekly chart and has closed above the previous swing-high zone of 24,750–24,800 for the second consecutive week. Momentum indicators, including the RSI and MACD, have also turned positive, with the MACD line crossing above the signal line. The immediate resistance for the index is identified at the recent swing high of 25,424. A sustained move above this level would signal renewed buying momentum.
Bank Nifty Nears Record Highs
Bank Nifty has also witnessed a trendline breakout, followed by strong follow-through moves. The index is currently just 1.2 percent away from its all-time high. This outperformance is largely attributed to the strong rally in Public Sector Undertaking (PSU) banks, which gained 7.84 percent this week, compared to a 2 percent advance in private banks.
Shah noted that while some profit booking cannot be ruled out after the sharp rally, the broader bullish bias remains intact as long as the index sustains above the 59,000–58,800 support zone. The RSI has broken above its downward-sloping trendline, and the index closed above the upper Bollinger Band, a phenomenon often observed during the early stages of strong trending moves.
Stock Picks: BHEL and Varroc Engineering
For the coming week, SBI Securities has selected BHEL and Varroc Engineering as its top two stock recommendations based on technical indicators.
**BHEL** has shown a steady rebound from its upward-sloping trendline, indicating sustained buying interest. The stock continues to trade above its key moving averages, and the MACD line has crossed above both the signal line and the zero line. Shah recommends accumulation in the Rs 432–438 zone, with a stop-loss at Rs 424. The stock could test the Rs 465 level in the short term.
**Varroc Engineering** has given a double-bottom neckline breakout on the daily chart, reinforced by a breakout above its downward-sloping trendline. The RSI has started moving higher, and the DI+ has crossed above DI- in the ADX indicator, suggesting that bulls are gaining dominance. Accumulation is recommended in the Rs 830–840 zone, with a stop-loss at Rs 815. The stock could test the Rs 890 level in the short term.
Midcap and Smallcap Indices Show Strength
The Nifty Midcap 100 Index has registered a higher close for the third consecutive week after rebounding from its upward-sloping trendline. The immediate resistance is placed in the 62,400–62,500 zone, while support is found in the 61,200–61,100 zone.
Similarly, the Nifty Smallcap 100 Index has rebounded from its 100-week EMA and has registered a higher close for three consecutive weeks. The index has reclaimed key short-term and long-term moving averages on both daily and weekly timeframes. The immediate support for the Smallcap 100 index is placed in the 19,300–19,200 zone.