F&O interview | What does the current long-short ratio reveal about FII positioning? Sudeep Shah on Ola, Newgen, 4 more top weekly movers

Domestic benchmark indices recovered from a gap-down opening to end on a firm base. IT stocks emerged as major drags in a volatile trading session, although broad-based buying across sectors kept markets resilient. The Nifty climbed 116.90 points, or 0.46%, to settle at 25,571.25, while the BSE Sensex rose 316.57 points, or 0.38%, to end at 82,814.71.In light of the US Supreme Court’s decision on Friday to declare Trump’s tariffs illegal, sentiments are likely to remain positive, but greater volatility cannot be ruled out.

Analyst Sudeep Shah, Vice President and Head of Technical & Derivatives Research at SBI Securities, interacted with ETMarkets on the outlook for the Nifty and Bank Nifty as well as an index strategy for the week ahead. Below are the edited excerpts from his chat:

Q: Nifty managed to end the week with a gain of 0.4% but failed to cross the 25,600 mark. What do useful graphs suggest for the next week of action?

Last week, the benchmark index Nifty traded within a narrow range of 512 points, the tightest weekly range in the last four weeks, resulting in the formation of a NR4 pattern. Interestingly, despite the limited range, volatility remained high. During the first three trading sessions, the index witnessed a gradual pullback but saw a sharp reversal on Thursday, wiping out all the gains made earlier in the week. On Friday, the index again found support at the bottom of the weekly range and recovered. This erratic price behavior indicates that something more structural is unfolding beneath the surface.

Since February 4, the index has been consolidating within a certain range from 26,009 to 25,373. Even within this narrow bandwidth, volatility remains high. Due to continued consolidation in recent sessions, all major moving averages have flattened out. Momentum indicators and oscillators also point to a sideways phase, with the daily RSI moving within a narrow range for the past 13 trading sessions. Such prolonged compression often acts as a precursor to a decisive directional movement.

Going forward, we expect the index to continue on a sideways trajectory in the near term, with stock-specific action likely to remain brisk. However, following the Supreme Court’s ruling against Trump-era tariffs, the market could open with a notable rise of nearly 350 to 400 points, buoyed by positive global sentiment.

In terms of crucial levels, the 25,400 to 25,350 zone will continue to act as a key support area as several previous swing lows converge in this region. A sustained decline below 25,350 could pave the way for a sharper decline towards 25,000. On the upside, the 25,950 to 26,000 band is expected to serve as a key resistance zone for the index. The index’s behavior around these crucial levels will play a decisive role in shaping the next meaningful change in direction.

Q: The AI ​​Summit made headlines this week and one of the key findings was Nvidia and Anthropic announcing partnerships with Indian companies. Beyond the headlines and sentimental rally, how do you see this development and the stocks that will now fly under your radar?

The AI ​​Summit announcements indicate a structural shift and not just a sentiment-driven movement. NVIDIA is working with Indian players including Larsen & Toubro and Yotta to build sovereign AI infrastructure and GPU capacity in India. Meanwhile, Anthropic has collaborated with Infosys to develop enterprise AI solutions using Claude models.In the medium term, this could unlock new revenue streams for IT services and digital infrastructure companies. Stocks like Infosys, Tata Consultancy Services and L&T remain on the radar.

That said, the IT index remains under pressure due to concerns about AI-induced disruption, and is not yet showing clear signs of stabilization. The real impact will emerge gradually, and investors should monitor continued deal momentum and strong buying interest before expecting a sustained trend reversal.

Q: What is your overall view on midcap and largecap IT stocks?

Overall, the IT space remains under intense pressure, across both large and mid-cap names. The Nifty IT Index has broken almost 17% in the last three weeks and has decisively broken below its key long-term support, the 200-week EMA on the weekly chart. The momentum indicators are also weak: the RSI has fallen below 40, the MACD is below the zero line and a rising ADX indicates that the bearish trend is gaining strength.

Heavyweights and midcap players such as Tata Consultancy Services, Infosys, Wipro, Mphasis, LTIM and LTTS have all fallen below their 200-week moving averages. FIIs have also sold Rs 10,956 crore in the IT sector in the first half of February 2026.

The structure is clearly weak for now. Avoid bottom fishing and try to catch a falling knife. Despite recent AI-related announcements, the benefits are long-term. It is wise to wait for the IT index to stabilize and for clear signs of strong buying interest before planning new exposure.

Q: What is your view on Bank Nifty?

The benchmark banking index, Bank Nifty, continues to deliver stellar performance and significantly outperforms the tier one indices. While the broader Nifty is trading almost 3% below its all-time high, Bank Nifty is near record levels, underscoring the sector’s impressive strength. This relative outperformance is further corroborated by the Bank Nifty Nifty ratio chart, which has risen to a 33-month high, which is a strong indication that the market leadership currently rests with the banking pack.

With the index hovering around its lifetime highs, all moving average-based technical settings are aligned in the bulls’ favor. The daily RSI is steady around 60, reflecting stable momentum, while the weekly RSI is already deeper into bullish territory, reinforcing the strength of the ongoing trend.

Given this robust chart structure and momentum, Bank Nifty seems well positioned to continue its upward trajectory in the coming sessions. In terms of key levels, the 20-day EMA zone at 60,500 to 60,400 acts as a key support area. On the upside, immediate resistance is at 61,600 to 61,700. A sustained break above 61,700 could trigger a strong upward rally, potentially opening the doors to new all-time highs and the next leg of bullish momentum.

(Disclaimer: The recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times.)