Wait for the stock to stabilize, to form a base. That hasn't happened.
In the shifting currents of India's equity markets, technical analyst Sudeep Shah offers a study in contrasts: one prominent stock, IndiGo, has broken through every layer of technical support and now demands the patience of a fisherman who knows better than to cast into troubled waters, while the broader indices and select financial names quietly rebuild their foundations after an orderly retreat. The market, as it so often does, rewards those who distinguish between a stock in freefall and a market finding its footing. Shah's weekly read is ultimately a meditation on timing — on knowing when to wait and when to act.
- IndiGo has collapsed through all four major moving averages with RSI at 30 and MACD deep in negative territory, making it one of the most technically damaged large-cap stocks in the current market.
- The broader Nifty 50, despite opening December at a record high before pulling back, found precise support at its 20-day EMA and a rising channel floor — a confluence that signals the correction was healthy, not harmful.
- Bank Nifty received a sharp catalyst from the RBI's 25-basis-point rate cut, bouncing firmly from its own 20-day EMA with weekly candle patterns and RSI behavior confirming that buyers are defending key levels.
- Cholamandalam and PB Fintech have emerged as Shah's top picks, both displaying bullish directional crossovers, rising RSI momentum, and clear accumulation zones that offer defined entry and stop-loss levels.
- The Nifty Smallcap 100 still trades below its 200-day moving average, a quiet reminder that the recovery is not yet broad-based and that selectivity remains the discipline of the moment.
Sudeep Shah, technical research chief at SBI Securities, delivered a pointed warning this week to investors eyeing IndiGo's nine percent decline as a buying opportunity: the stock has broken through every major exponential moving average — the 20, 50, 100, and 200-day — while its RSI has fallen to 30, its MACD has crossed below both the signal line and zero line, and its ADX has flipped bearish. The message was simple: wait for a clear base before stepping in.
The broader market, however, paints a more encouraging picture. The Nifty 50 hit a record high to open December, pulled back in orderly fashion to its 20-day EMA — which also aligns with the lower edge of a rising channel — and recovered to close the week near 26,200. Banking and IT stocks have provided the leadership keeping the main indices resilient, even as the Nifty Smallcap 100 continues to trade below its 200-day moving average. Shah sees the Nifty pushing toward 26,350 and potentially 26,500 if support holds above 25,900.
Bank Nifty tells a similar story of resilience. After its own record high and subsequent pullback, it found support at the 20-day EMA, received a sharp boost from the RBI's rate cut, and now shows weekly candle patterns and RSI behavior consistent with active buying on dips. Shah targets 60,400 to 61,000 on the upside, with support anchored at 59,100 to 59,200. Shriram Finance adds to the constructive tone, having defended its 20-day EMA for three consecutive sessions with ADX indicators widening again toward bullish alignment.
For the week ahead, Shah's two featured picks are Cholamandalam Investment and PB Fintech. Cholamandalam rebounded from its 50-day EMA near 1,670 rupees, with the rate cut improving sentiment and the positive DI crossing above the negative DI on the ADX. Shah recommends accumulating between 1,720 and 1,730 rupees, with a stop at 1,675 and a target of 1,850. PB Fintech, meanwhile, remains in a sustained uptrend, having broken above multi-week resistance at 1,860 to 1,890 rupees with expanding MACD histogram bars and an RSI above 60. The suggested entry is 1,875 to 1,895 rupees, stop at 1,830, targeting 2,020. Indus Towers rounds out the constructive setups, breaking out of a tight multi-week range on December 5 with strengthening momentum across both daily and weekly timeframes. The week's technical landscape, in Shah's telling, is one that punishes impatience with broken stocks and rewards discipline with those quietly gathering strength.
Sudeep Shah, the technical research chief at SBI Securities, sat down this week with a clear message for investors tempted by IndiGo's recent nine percent slide: don't catch this falling knife. The airline stock has broken through every meaningful moving average—the 20, 50, 100, and 200-day exponential moving averages—a technical capitulation that signals serious weakness ahead. The RSI has plummeted to 30, deep into bearish territory. The MACD has crossed below both its signal line and the zero line, with red histogram bars stacking up like warning signs. The directional indicator on the ADX has flipped, with the negative DI now above the positive DI, confirming that selling pressure is intensifying. Shah's advice was unambiguous: wait. Don't fish for a bottom until the stock establishes a clear foundation.
But the broader market tells a different story. The Nifty 50 opened December with a record high, then pulled back in what Shah describes as an orderly correction—the kind that stops precisely where it should. The index found support at the 20-day exponential moving average, which also happens to align with the lower edge of a rising channel, creating a confluence of technical strength. From there, it recovered smartly, closing the week near 26,200, essentially flat. Banking and IT stocks have been the heavy lifters, their relative strength keeping the main indices resilient even as smaller-cap stocks lag. The Nifty Smallcap 100 still trades below its 200-day moving average, a sign that not all boats are rising with the tide. If the Nifty holds above 25,950 to 25,900, Shah sees the index pushing toward 26,350, with 26,500 as the next meaningful target.
Bank Nifty, too, is constructive. After hitting a record high, it pulled back but found firm support at the 20-day EMA—the same technical level that has proven reliable before. The RBI's recent 25-basis-point rate cut gave the index a sharp bounce. On the weekly chart, a small-bodied candle with a lower shadow suggests active buying on dips. The RSI held near 61 during the pullback and has now bounced above its 9-day average, validating the underlying bullish momentum. Shah expects the index to extend toward 60,400, with potential to reach 61,000 if buying pressure holds. Support sits firm at 59,200 to 59,100.
Shriram Finance presents another constructive setup. The stock rebounded sharply on December 5 following the rate cut, and it has defended its 20-day EMA for three consecutive sessions—a sign of steady accumulation at lower levels. The ADX's directional indicators, which had been converging, are now widening again, suggesting bullish strength is re-emerging. The Bollinger Band framework shows the stock moving toward the upper band, and the RSI has bounced sharply from the 60 region. The collective picture points to improving upside bias.
For next week, Shah's two top picks are Cholamandalam Investment and PB Fintech. Cholamandalam staged a strong rebound from its 50-day EMA near 1,670 rupees after briefly dipping below it in late November. The RBI rate cut improved sentiment. On the ADX, the positive DI has crossed above the negative DI, signaling strengthening bullish tone. The RSI has climbed from 45 to 56, reflecting improving momentum. Shah recommends accumulating in the 1,730 to 1,720 rupee zone with a stop-loss at 1,675, targeting 1,850 rupees in the near term.
PB Fintech remains in a strong uptrend, consistently forming higher highs and higher lows. The stock broke above a multi-week resistance zone at 1,860 to 1,890 rupees, reinforcing the bullish structure. The RSI sits above 60, the ADX's directional indicators are widening, and the MACD histogram bars are expanding—all signs of strengthening momentum. Shah suggests accumulating at 1,895 to 1,875 rupees with a stop-loss at 1,830, targeting 2,020 rupees.
Indus Towers, meanwhile, has been trading in a tight 395 to 413 rupee range since mid-November, consistently holding above the 20-day EMA. On December 5, it broke out above this range with a strong bullish candle. The RSI has moved above 60 on both daily and weekly charts, signaling firm momentum. The bearish MACD histogram is weakening, suggesting a possible bullish crossover ahead. With a clean breakout and strengthening indicators, the stock appears well-positioned for near-term gains. The technical landscape, in Shah's view, rewards patience with IndiGo but offers genuine opportunity elsewhere.
Citas Notables
It is prudent to avoid bottom-fishing and stay away until the stock forms a clear base.— Sudeep Shah, Head of Technical and Derivatives Research, SBI Securities
Banking and IT sectors have provided market leadership, keeping the frontline indices resilient despite broader market caution.— Sudeep Shah
La Conversación del Hearth Otra perspectiva de la historia
Why is IndiGo worth avoiding when the market has already punished it so severely? Doesn't a nine percent drop usually mean the worst is over?
Not always. The damage here isn't just the price—it's that every moving average the stock relied on for support has been broken. When that happens, there's no technical floor. The stock is in free fall.
And the RSI at 30—what does that really tell us?
It tells us the selling is extreme and exhausted, but exhaustion doesn't mean reversal. It means the stock could sit here or go lower. There's no signal yet that buyers are stepping in. We're waiting for the stock to stabilize, to form a base. That hasn't happened.
You mentioned banking and IT are carrying the market. What happens if they stumble?
That's the real risk beneath the surface. The Nifty Smallcap 100 is still below its 200-day moving average. The smaller companies aren't participating in this rally. If the heavyweights slip, there's no cushion underneath.
So the Nifty itself is safe, but the market is narrower than it looks?
Exactly. The Nifty can hit 26,500 if support holds, but it's being carried by a few sectors. That's not a weak market, but it's not as broad as you'd want to see.
What makes Cholamandalam and PB Fintech different from IndiGo right now?
They're forming bases, not breaking them. The directional indicators are crossing in their favor. The momentum is improving, not deteriorating. They're early in moves up, not late in moves down.
And if the broader market turns?
Then everything gets tested. But these two have technical structure on their side. IndiGo doesn't. That's the difference.