Rohit Srivastava on why 25,800 is the key support and 26,500 the next big test for Nifty

The Nifty appears to be stabilizing around key support levels as markets enter the new year, with technical indicators pointing to a possible breakout in the medium term, said Rohit Srivastava, founder of Strike Money Analytics and Indiacharts.Speaking to ET Now, Srivastava said the index has touched multiple bottoms near the 25,800 zone, indicating strong support. “This could be another new base formation. From here, the Nifty should look to make a move towards the trendline resistance around 26,500, which has capped rallies since October and November,” he said.

26,500 Key level for medium-term trend

Srivastava believes that a decisive break above 26,500 would indicate a shift towards a stronger uptrend in the medium term. “If we manage to break above this level and hold, the index could move significantly higher. Even if there is a pullback in between, the broader structure suggests that 26,500 will be breached eventually,” he noted.

For now, the bias remains positive, with the market trying to move higher from current levels as the new trading range begins.

PSU banks, metals and autos led the way in 2025

Reflecting on the sectoral performance in 2025, Srivastava said the year cannot be described as merely a PSU banking story even as they topped the charts. “PSU banks returned almost 31%, but metals were close behind at around 29%, while autos rose almost 23%,” he said.

According to him, the common driver behind these outperformers was the aggressive rate cuts by the RBI under the new governor, which benefited interest rate-sensitive sectors such as banking, metals and automotive.

Interest rate sensitive stocks are performing better, PSU banks are leading in the financial sector

Within the financial sector, PSU banks and NBFCs will clearly outperform large private banks in 2025. “This trend of PSU banks and NBFCs outperforming largecap banks has been quite strong and is unlikely to reverse suddenly,” Srivastava said.

Wider participation needed for the next rally

However, for the Nifty to finally cross the 26,500 mark, Srivastava emphasized the need for broader sector participation. “Auto, metals and PSU banks have done the heavy lifting. For the next leg of the rally, other sectors will have to join in – and I believe they will eventually,” he added.

With Nifty’s position above crucial support and leadership of rate-sensitive sectors remaining intact, the technical situation points to a cautiously optimistic outlook. A breakout above 26,500 could mark the start of a stronger phase for the broader market, provided the sector rotation extends beyond the current leaders.