F&O Talk: Nifty IT gaining strong momentum, says Sudeep Shah; outlines HDFC Bank, ICICI Bank strategy after Q1
Strong Q1 earnings, sharp buying in IT stocks and other factors boosted investor sentiment despite the global market crash.The Sensex surged over 964 points to close at 78,151, while Nifty 50 gained around 262 points to end the session at 24,334. The rally occurred despite weakness in the broader market, with the Nifty Midcap 100 and Nifty Smallcap 100 indices declining up to 0.4%.Analyst Sudeep Shah, Vice President and Head of Technical & Derivatives Research at SBI Securities, interacted with ETMarkets regarding the outlook for the Nifty and IT, as well as an index strategy for the upcoming week. The following are the edited excerpts from his chat:Nifty was largely flat this week. How are charts looking for the weak ahead as Q1 earnings come thick and fast?Last week, the benchmark index Nifty traded within a narrow range of just 367 points, marking its smallest weekly trading range since December 2025. More importantly, the index has remained confined to the 24,530-23,785 zone for the past five weeks, forming a series of small-bodied, indecisive candles on the weekly chart. This price action reflects a clear lack of conviction from both bulls and bears, with neither side willing to take decisive control. But history suggests that such prolonged indecision rarely lasts for long.The subdued price movement has also resulted in a Bollinger Band Squeeze on the daily chart—a phenomenon that occurs when volatility contracts sharply and the Bollinger Bands narrow. Such periods of low volatility are often followed by a significant directional move. Momentum indicators are also echoing the same message. The daily RSI and Stochastic Oscillator continue to move sideways, while the trend strength indicator, ADX, has slipped to 10.56, its lowest reading since July 2021. Collectively, these indicators suggest that the market is lacking directional strength. The only question now is—which side will seize control when volatility returns?With several index heavyweights, including Reliance Industries, HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank, set to announce their quarterly earnings over the weekend, all eyes will be on Monday's trading session. The market's reaction to these earnings could determine whether Nifty finally breaks out of its prolonged consolidation.From a technical perspective, the 24,500-24,550 zone remains the immediate hurdle, as it coincides with the previous swing highs. A decisive move above 24,550 could trigger a fresh rally towards 24800, followed by 25,000 levels in the short term. On the downside, the 20-day EMA zone of 24,100-24,050 is expected to provide strong support.Nifty IT performed well this week, up nearly 5%. Is this a technical bounceback or hidden value in stock?Nifty Bank remained rangebound. How do you see it panning out on Monday after major private banks report their Q1 earnings?The banking benchmark index, Bank Nifty, has been consolidating within a broad range of 58,706-56,549 over the last 23 trading sessions. However, the index is now approaching the upper end of this range and appears to be on the verge of a decisive breakout from its prolonged consolidation phase.From a technical standpoint, Bank Nifty is trading comfortably above its key moving averages, reflecting a positive underlying trend. Momentum indicators and oscillators continue to support the bullish setup. The daily RSI is currently placed above the 60 mark and remains in an upward trajectory, indicating strengthening buying momentum and improving market sentiment.The upcoming trading session on Monday assumes greater significance, as several heavyweight constituents of the index, including HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank announced their quarterly earnings. Given their substantial weightage in the index, the earnings outcome is likely to play a crucial role in d
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