The Nifty has broken out of a five-week consolidation, signaling a resumption of its uptrend and is expected to rally towards 26,800 in January. Analysts suggest buying on dips as long as the index holds above key support levels, with positive momentum indicators supporting the bullish outlook.
After closing at a high of 26,328.55 on Friday, the Nifty is expected to regain momentum in January. Analysts said index is trading above key averages and showing strength in momentum indicators, making dips a buying opportunity as long as it holds above 26,000.
DHARMESH SHAH
VICE PRESIDENT AND HEAD OF TECHNICAL, ICICI SECURITIES
Where is Nifty headed this week?
The breakout from a five week consolidation range of 26,300-25,700 confirms the resumption of the uptrend. The Nifty is expected to extend rally towards 26,800 in January. Our positive bias is supported by the Bank Nifty propelling the index to a fresh all-time high after retracing a four-week decline in just a single week. The ratio chart of MSCI India versus MSCI World has once again bounced from cyclical lows held since CY21. The rally has broadened significantly over the past two weeks, with 50% of stocks trading above their 50-day SMA, compared with 27% two weeks ago.
Trading Strategy
Any decline towards 26,170-26,250 (Nifty spot levels) should be used as a buying opportunity, with multiple targets of 26,600. This buy-on-dips template remains valid as long as the Nifty defends the key support threshold of 25,980.
TOP BETS FOR THE WEEK
Larsen & Toubro: Target Price: Rs 4,520 | Stop Loss: Rs 3,798 | CMP: Rs 4,164.7
The stock has broken out of a 20-month consolidation and hit a fresh all-time high. It continues to form a higher high-higher low structure within a rising channel and holds above its 20-week EMA, keeping the broader uptrend intact. Buying is recommended in the Rs 4,000-Rs 4,165 range.
Union Bank: Buy | Target Price: Rs 175 | Stop Loss: Rs 144 | CMP: Rs 157
Stock has registered a breakout from Cup and Handle formation while forming a higher base above 10-week EMA. Up-move is backed by pick-up in volumes, validating healthy accumulation and strengthening the case for an upside. We recommend buying in the range of Rs 151-157.
TANMAY SHAH
RESEARCH HEAD, SIHL
Where is Nifty headed?
The Nifty has decisively broken out of its prolonged consolidation phase, signalling a transition from range-bound action to trend resumption. Friday’s strong close above the 26,300 breakout level is technically significant, marking the first weekly close above the upper boundary of the consolidation zone.
Post-breakout price behaviour indicates strong acceptance above the 26,300 level, which is now expected to act as immediate support. The index continues to trade comfortably above its 20-day and 50-day EMAs, confirming underlying trend strength.
The RSI sustaining above the neutral zone reflects improving momentum and increases the probability of an upside extension towards the 26,550-26,700 zone in the near term. As long as the index holds above the 26,050-26,080 support band, the broader outlook remains bullish, with corrective dips likely to attract buying interest.
Trading Strategy
Traders may adopt a buy-ondips approach, maintaining a stop-loss at 26,080 and targeting an upside move towards 26,550. For derivatives participants, a bull call spread — buying the 26,300 CE and selling the 26,600 CE for the January 13 expiry — offers a risk-defined way to participate in a potential upside breakout while accounting for continued consolidation.
TOP STOCK BETS:
NTPC: Target Price: Rs 366 / Rs 375 | Stop Loss: Rs 339 | CMP: Rs 351.65
After a year-long time correction via consolidation, the stock has decisively closed above its 50-week SMA, indicating a potential trend reversal. Holding above the Rs 339 support zone maintains positive momentum, with short-term technical targets seen at Rs 366 and Rs 375 as the broader structure turns bullish.
Petronet LNG: Target Price: Rs 302 / Rs 309 | Stop Loss: Rs 286 | CMP: Rs 290.75
Stock has formed a classic breakout-retest structure, taking support at the 200-week SMA. The retest zone has developed into a double-bottom formation, reinforcing trend strength. Sustained trading above Rs 286 may trigger an upside move towards Rs 302, followed by Rs 309.
SUDEEP SHAH
Vice President and Head of Technical and Derivative Research, SBI Securities
Where is Nifty headed?
Strong momentum across key sectors such as banking, auto, metals, oil & gas and financials, along with the prevailing technical setup, suggests that the post-consolidation breakout 20-day EMA zone of 26,050 is likely to act as immediate support. As long as this zone holds, the index appears positioned to advance towards 26,580 and subsequently 26,800.
Trading Strategies: Traders can initiate long positions in the Nifty on dips towards 26,100-26,150 with a protective stop at 26,000 and upside targets of 26,650 and 26,800. The Bank Nifty continues to display strong leadership and remains a preferred long candidate. Fresh positions can be considered on declines to 59,650-59,900, with a stoploss at 59,300 and targets of 60,900 and 61,200.
TOP STOCK BETS:
Glenmark Pharma: Target Price: Rs 2,180 | Stop Loss: Rs 2,000 | CMP: Rs 2,073.
Glenmark has resumed its uptrend and is trading above its 20-day and 50-day EMAs, indicating strengthening momentum. Improving relative strength, steady volumes and an RSI above 60 support the bullish setup. Holding above Rs 2,000 keeps the stock positioned for a move towards Rs 2,140-2,180.
Indian Bank: Target Price: Rs 950 | Stop Loss: Rs 830 | CMP: Rs 861.35
Indian Bank stock continues to trade above its 20-day and 50-day EMAs. Strong relative strength within the public sector banking space, rising volumes and a bullish RSI support improving momentum. Holding above the Rs 825-830 support zone keeps the stock positioned for a move towards Rs 925-950.
