Useful: consolidation before the next step up
From a chart perspective, Patel noted that the Nifty continues to trade above all its major moving averages, 20, 50, 100 and 200 days, indicating an intact uptrend.”In the near term, Nifty is likely to consolidate in the 26,000-26,350 range. We had earlier seen a similar consolidation between 25,700 and 26,000, followed by a breakout. A similar pattern could happen again,” he said.
Immediate support is placed at 26,000, followed by a stronger base at 25,700. On the weekly chart, 25,700 remains a crucial level, in line with the 50-day exponential moving average.
“Unless 25,700 is breached decisively, the overall situation remains bullish. The strategy should be to buy on dips, with a stop-loss near 25,700, while all-time highs remain the next upside target,” Patel added.
Signal strength moving averages
Patel reinforced the bullish bias, highlighting that the slope of all major moving averages is upward. “This confirms that the trend is positive. Any correction towards support should be seen as an opportunity rather than a threat,” he said.
Midcaps: signs of revival underway
After underperforming for several months, mid-cap stocks have emerged relatively strong over the past few sessions.“The Nifty Midcap indices are trading above all major moving averages and have gained support near the 22,000 zone,” Patel said.
He expects the Nifty Midcap 150 to move towards 23,000-23,200 levels over the next 1-2 months, with strong support around 22,000-22,100.
Patel believes mid-caps could outperform large-caps in the short term, especially as several troubled stocks show early signs of a turnaround.
Railroad shares back in the picture
Among midcaps, railway stocks are once again in focus, ahead of the Union Budget.
“Several railway names like IRCON, RITES and RVNL have corrected almost 60% from their July 2024 highs and are now forming basic patterns,” Patel said.
He pointed out that many of these stocks have shown double bottom formations close to long-term moving averages, suggesting that risk-reward ratios will improve over the next two to four months.
Sector overview: IT, FMCG, Metals
IT sector:
The Nifty IT index has witnessed a strong rally from the 33,400 zone to near 39,500. While a temporary pause cannot be ruled out, Patel remains constructive on the sector from a medium-term perspective.
“The key support for IT is near 37,500. Any dip should generate buying interest, and the sector looks well positioned for 2026,” he said.
FMCG:
The FMCG index is consolidating in a broad range of 54,000–57,000.
“This consolidation could ultimately be positive. Stocks like ITC and Nestlé India look attractive for the medium term,” Patel said.
He expects the ITC to move towards a level of 450-460, while Nestlé India, after breaking above the 1,200 mark, could move towards 1,400-1,500 by 2026.
Metal:
While the structure remains positive, Patel warned of new positions at current levels.
“The rally in metals appears to be continuing. Copper, for example, is up almost 90% from its September 2025 low. A mean return cannot be ruled out,” he said, advising investors to book profits and avoid new exposure for now.
Stock-specific choices
Coal India:
Coal India has emerged from a long consolidation phase on the weekly chart.
“The stock remained above the breakout zone of 395. The medium-term target is 460-470 for 2026, with a stop-loss below 370 on a daily close basis,” Patel said.
Trent:
Trent has corrected sharply from its highs and is now finding support near the 200-week exponential moving average.
“The structure suggests potential for a recovery towards 6,600-6,700 levels in 2026,” he added, with a stop-loss below 3,400 on a daily close basis.
Sectors to avoid
Patel advised caution on precious and base metals linked to sharp commodity rallies.
“With gold, silver and copper making steep moves, the risk-reward ratios are unfavorable at current levels. It is better to stay on the sidelines for now,” he said.
Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts/brokers do not represent the views of Economic Times.
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