ETMarkets.com Synopsis Nifty could extend its recovery towards 23,500 if it decisively breaks above the 23,150–23,200 resistance zone, says SBI Securities' Sudeep Shah.
He also shares his outlook on IT, midcap and smallcap indices, sector trends and six stocks, including TVS Motor, Coforge and ICICI Bank, ahead of Diwali.
By Veer Sharma, ETMarkets.com Oct 31, 2026, 11:45:00 AM IST Follow us Indian benchmark indices Sensex and Nifty ended the week in positive territory, gaining up to 0.5%, even as broader markets witnessed a sharp sell-off amid mounting headwinds, including a surge in oil prices above $117 a barrel.ADVERTISEMENT The Sensex rose 308 points to close near 74,460 on Friday, while the Nifty 50 advanced 116 points to settle at 23,053.
In contrast, broader markets came under heavy selling pressure, with the Nifty Midcap 100 and Nifty Smallcap 250 indices declining up to 2%.Analyst Sudeep Shah, Vice President and Head of Technical & Derivatives Research at SBI Securities, interacted with ETMarkets regarding the outlook for the Nifty IT, FIIs, and an index strategy ahead of Diwali.
The following are the edited excerpts from his chat: 1.) Nifty saw half a percent rise this week.
What is your view on Nifty going forward and can the momentum continue in the coming week?
During October, the benchmark index Nifty traded within a narrow range of 731 points.
However, beneath this relatively narrow trading band, the index witnessed heightened volatility throughout the month before managing to close above the crucial 23,000 mark.
On the monthly chart, the index has formed a small-bodied candle with shadows on either side, reflecting indecisiveness among market participants.
Notably, this formation has emerged following a strong bearish candle and in the vicinity of a crucial upward-sloping trendline support.
Interestingly, this combination of technical signals could be hinting at a potential shift in the market's underlying dynamics.
Supporting this possibility, the recent price action suggests that selling pressure has eased considerably, with Nifty showing signs of establishing a base near an important support zone.
The improving price structure is also evident on the lower timeframe.
Meanwhile, the downward slopes of the 50-day and 100-day EMAs have flattened considerably, indicating a gradual improvement in the underlying trend.
Adding to the positive momentum, the daily RSI has moved above the 50 mark and continues to trend higher.
The convergence of these technical developments raises an important question: Is Nifty gearing up for a more meaningful recovery?The improving technical setup strengthens our conviction that the benchmark index could extend its ongoing pullback rally over the next couple of trading sessions.
From a trading perspective, the 22,800–22,750 zone will serve as an important support area, and holding above this band will be crucial to sustaining the recovery.
On the upside, the 50-day EMA, placed in the 23,150–23,200 zone, is likely to act as the immediate hurdle.
A decisive breakout above this resistance could change the near-term technical landscape and open up the next leg of recovery towards 23,500.ADVERTISEMENT 2.) The IT index was a bright spark to end the week on a high.
How is the index placed?
Also, it is trading above its short and long-term moving averages.
These averages are on a rising trajectory.
Interestingly, the daily RSI is in the super bullish zone as per RSI range shift rules.
How are charts looking?
For the second consecutive month, the broader market indices, Nifty Midcap 100 and Nifty Smallcap 100, ended in negative territory.
However, both indices witnessed a meaningful pullback from lower levels during the last week and formed bearish candles with long lower shadows, indicating buying interest emerging at lower levels despite prevailing weakness.ADVERTISEMENT ADVERTISEMENT Currently, both indices continue to trade below their key short-term and long-term moving averages, which remain in a downward trajectory, suggesting that the broader trend is still corrective in nature.
Nevertheless, the recent recovery has significantly narrowed the gap between the indices and their short-term moving averages, hinting at an improvement in near-term sentiment.
Momentum indicators and oscillators remain largely neutral and are pointing towards a phase of consolidation.Going ahead, Nifty Midcap 100 is expected to find immediate support in the 56,500-56,400 zone.
On the upside, the 20-day EMA region of 58,200-58,300 is likely to act as a crucial resistance zone.
A decisive breakout above this hurdle could pave the way for a further advance towards the 59,300 level.ADVERTISEMENT Similarly, for Nifty Smallcap 100, the immediate support is placed in the 18100-18000 zone.
On the higher side, the 20-day EMA zone of 18,800-18,850 is expected to act as a key resistance area.
A sustained move above this barrier may strengthen bullish momentum and trigger a further rally towards the 19,250 level in the near term.4.) What’s your strategy for Trent, Indigo, Equitas Small Finance Bank, and Meesho.
Trent has been consolidating within a broad range of Rs 3,400–2,546 since late April, as seen on the weekly chart.
The key moving averages have flattened, reflecting a lack of directional bias.
Similarly, the ADX is moving sideways, indicating subdued trend strength and limited directional momentum.
A decisive breakout on either side of the consolidation range will provide fresh directional cues.ADVERTISEMENT Indigo has staged a sharp pullback of around 9% from its recent low of Rs 4,464 recorded on October 23.
The stock has reclaimed its key short-term moving averages, namely the 20-day and 50-day EMAs, indicating an improvement in near-term sentiment.
The 20-day EMA zone of Rs 4,760–4,750 is likely to act as immediate support.
The positive momentum could extend further as long as the stock sustains above this support zone.Equitas Bank witnessed a breakdown from its Rs 71–65 consolidation range on October 29, signalling a deterioration in the technical setup.
The RSI is trending lower, indicating persistent bearish momentum.
Additionally, the DI lines have widened, with DI- positioned well above DI+ on the ADX indicator, highlighting the increasing dominance of bears.
The bearish bias is likely to persist as long as the stock trades below the Rs 63–65 resistance zone.Meesho has been consolidating within a range of Rs 245–208 since late September.
The ADX is declining, indicating subdued volatility and a lack of strong directional momentum.
Additionally, the key moving averages have flattened, reflecting a sideways bias.
A decisive breakout on either side of this range will be crucial in determining the stock's next directional move.5.) What are the sectors you feel that can outperform in the coming week ?
