The Nifty is likely to remain positive as long as it holds above the crucial 24,800 support level, although some consolidation after the recent rally would be normal and could help the index build a stronger base for its next leg of gains, said Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities.

The recent swing high of 25,424 remains the immediate resistance for the index. A sustained move above this level would signal a fresh wave of buying momentum, Shah said in an interview with Moneycontrol.

For the coming week, Shah has picked BHEL and Varroc Engineering as his stock recommendations. "BHEL continues to trade above its key moving averages, while the MACD line has crossed above both the signal line and the zero line, accompanied by rising green histogram bars, reinforcing the bullish bias, while combination of technical signals points towards improving bullish momentum in Varroc Engineering," said Sudeep Shah.

Will the consolidation continue next week, with the Nifty 50 holding above the crucial support level of 24,800?

Nifty witnessed a downward-sloping trendline breakout on the weekly chart last week, followed by a phase of consolidation this week, during which the index formed a Doji candle. This indicates a healthy pause after the sharp rally rather than an immediate sign of a trend reversal. On the weekly chart, Nifty has negated its previous lower-low, lower-high structure and has closed above the previous swing-high zone of 24,750–24,800 for the second consecutive week, signalling an improvement in the broader price structure.

Momentum indicators also support the bullish outlook, with the RSI breaking above its downward-sloping trendline, indicating a decisive improvement in momentum, while the MACD line has crossed above the signal line, further reinforcing the positive bias. Additionally, the ADX on the weekly chart has started moving higher, indicating a gradual buildup in bullish trend strength.

A phase of consolidation following a sharp rally is normal and can help the index build a stronger base for its next leg of the upmove. As long as Nifty sustains above the crucial 24,800 support zone, the overall bullish bias is likely to remain intact. On the upside, the recent swing high of 25,424 remains the immediate resistance. A sustained move above this level would signal renewed buying momentum.

Does the golden crossover signal that the Bank Nifty could soon surpass its record high, or is the index likely to witness further profit booking before regaining strength?

Similar to Nifty, Bank Nifty also witnessed a trendline breakout last week, followed by a strong follow-through move this week. A significant part of the index's outperformance can be attributed to the strong rally in PSU banks, which gained 7.84 percent this week, while private banks advanced by 2 percent.

Bank Nifty is now just 1.2 percent away from its all-time high. On the technical front, the RSI has recently broken above its downward-sloping trendline on the weekly chart, reflecting a strong pickup in bullish momentum, while the MACD line has crossed above the signal line, further reinforcing the positive bias.

Additionally, the index closed above the upper Bollinger Band this week, a phenomenon often observed during the early stages of a strong trending move. Given the sharp rally, some profit booking cannot be ruled out. However, as long as the index sustains above the 59,000–58,800 support zone, the broader bullish bias is likely to remain intact, with Bank Nifty well positioned to challenge and potentially surpass its all-time high in the near term.

What are your top two stock picks for next week, based on technical indicators?

BHEL has witnessed a steady rebound from its upward-sloping trendline, drawn by connecting the lows of Rs 368 recorded on June 11 and Rs 372 on July 8. The stock approached this trendline support in late October and has steadily moved higher since then, indicating sustained buying interest at lower levels.

It continues to trade above its key moving averages, while the MACD line has crossed above both the signal line and the zero line, accompanied by rising green histogram bars, further reinforcing the bullish bias. Hence, the accumulation is recommended in the Rs 432–438 zone, with a stop-loss at Rs 424. On the upside, the stock could test the Rs 465 level in the short term.

Varroc Engineering has given a double-bottom neckline breakout on the daily chart, which is further reinforced by a simultaneous breakout above its downward-sloping trendline. The RSI, which had remained relatively flat, has started moving higher, indicating a revival in bullish momentum.

Additionally, the DI+ has recently crossed above DI- in the ADX indicator, suggesting that bulls are gradually gaining dominance over bears. The combination of these technical signals points towards improving bullish momentum. Hence, the accumulation is recommended in the Rs 830–840 zone, with a stop-loss at Rs 815. On the upside, the stock could test the Rs 890 level in the short term.

Is the recent strength in Amber Enterprises India signalling the potential for further sharp upside in the coming week?

Amber closed higher by a little over 9 percent on November 13, accompanied by a sharp surge in trading volumes, indicating strong buying interest. However, it would be premature to consider this a trend reversal at this stage, as the stock continues to trade below its 100-day and 200-day EMAs.

Additionally, the MACD line remains below the zero line, suggesting that the broader momentum is yet to turn decisively positive. On the upside, the immediate resistance is placed in the Rs 6,900–6,950 zone, which coincides with the previous swing high. A decisive close above this zone, followed by sustained buying interest, could signal a potential trend reversal and open up further upside in the near term.

Has GE Vernova T&D confirmed a cup-and-handle breakout? If so, could the stock reclaim its September swing high next week?

Rather than just a Cup and Handle pattern breakout, GVT&D has also given a downward-sloping trendline breakout on the daily chart, which lends further strength to the bullish setup. Cup and Handle patterns are generally considered continuation patterns and are typically observed after an established uptrend. While such patterns can also emerge after a downtrend, as seen in the current case, they are generally approached with caution.

On the momentum front, the DI+ has crossed above DI- in the ADX indicator, suggesting that bulls are gradually gaining dominance over sellers. The RSI has also started moving higher, indicating a pickup in bullish momentum. The Rs 4,300–4,250 zone is likely to act as an immediate support. As long as the stock sustains above this zone, the ongoing pullback could extend further, with the stock potentially testing its September high in the near term.

Do you expect the outperformance of midcap and smallcap indices over the benchmark indices to continue next week, with further upside in the broader market?

On the weekly chart, the Nifty Midcap 100 Index has registered a higher close for the third consecutive week after rebounding from its upward-sloping trendline, indicating an improvement in the broader price structure. On the upside, the 62,400–62,500 zone is likely to act as an immediate hurdle, as it coincides with the previous swing high. On the downside, the 61,200–61,100 zone is likely to provide immediate support. As long as the index sustains above this support zone, the ongoing upmove could extend further in the near term.

The Nifty Smallcap 100 Index also witnessed a sharp rebound from its 100-week EMA three weeks ago and has registered a higher close for the third consecutive week. The index has reclaimed key short-term and long-term moving averages on both daily and weekly timeframes, indicating a broad-based improvement in its technical structure. The RSI has also started moving higher, reflecting healthy bullish momentum. The immediate support for the index is placed in the 19,300–19,200 zone. As long as it sustains above this support zone, the ongoing upmove is likely to remain intact and could extend further in the near term.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.