Stock Market This Week: Will Nifty Hit 26,500? Experts Decode Key Levels & Sectors to Buy

Indian equities closed last week on a positive note, with benchmark indices extending gains despite volatility and political noise. The Sensex ended 84.11 points higher at 84,561.78, while the Nifty 50 reclaimed the 25,900 level, signalling improving sentiment ahead of a catalyst-heavy week.

According to Sudeep Shah, Vice-President & Head of Technical and Derivatives Research at SBI Securities, markets absorbed the Bihar election outcome without major disruption. “The Bihar election outcome failed to trigger a major market reaction, as the NDA’s comfortable lead was widely anticipated and largely priced in,” he said.
Shah noted that while the verdict reinforces political continuity and boosts sentiment for infrastructure, PSU banks and state-linked sectors, traders remained cautious. “Weak market breadth and profit-booking reflected the fact that the Street is now looking beyond the election and focusing on larger catalysts such as the upcoming RBI MPC and the US Fed’s FOMC meeting,” he added.

Election Impact & Market Sentiment
Shah said the result removes “a minor political overhang” and keeps the medium-term view stable with a “buy-on-dips undertone.” The combination of political clarity and global event risks this week is expected to introduce some volatility but maintain a positive directional bias overall.

Nifty Technical Outlook: 26,500 in Sight?
The Nifty registered a strong rebound after testing the 25,300–25,330 support zone — an area aligned with the 50-day EMA and the 50% Fibonacci retracement of the 24,587–26,104 rally. This confluence triggered a sharp recovery, with the index climbing nearly 700 points from its recent low of 25,318.

On Friday, after a gap-down open and a largely sideways session, a late surge flipped sentiment as NDA strengthened its lead in Bihar. Nifty ended the week with a 1.64% gain above 25,900, forming a bullish candle that reinforced positive momentum. Midcap indices and Bank Nifty also hit fresh all-time highs.

Technically, Shah said Nifty is positioned strongly. “From a technical perspective, Nifty is now trading comfortably above its key moving averages, all of which are trending upward—a sign of sustained bullishness. The daily and weekly RSI indicators remain in positive territory, further supporting the case for an extended uptrend.”

Shah expects the index to target 26,200, followed by 26,500, in the short term.
Support: The 20-day EMA at 25,700–25,650 remains a crucial zone.

A breach could trigger profit-taking, but as long as this level holds, the outlook stays constructive.
In the near term, leadership is expected from sectors such as:
Nifty Private Bank
PSU Banks
Financial Services
India Defence
Automobiles
Oil & Gas
Capital Markets
Infrastructure
Pharma

Bank Nifty: Breakout Signals More Upside Ahead
Bank Nifty has finally broken out after three weeks of consolidation and closed above the 58,500 mark, registering a strong bullish candle on the weekly chart.

Resistance Levels:
58,700–58,800 (immediate)
A sustained break above 58,800 could lift the index toward 59,500 and 60,200 in the short term.

Support Levels:
20-day EMA at 57,800–57,700

“As long as this level holds, the overall bias remains positive,” Shah added.

Sensex Outlook: Eyes on 85,000 Breakout
The Sensex also staged a robust rebound after taking support at its 50-day EMA. From the recent low of 82,671, it jumped more than 2,200 points in five sessions. The index closed the week above 84,500, forming a bullish candle with sustained buying interest.

Shah said, “Currently, Sensex is trading well above all its key moving averages, which are not only rising but also aligned in the desired sequence, confirming a robust uptrend.”
Momentum indicators remain strong on daily and weekly charts.

Key Levels:
Resistance: 84,900–85,000
A decisive breakout above 85,000 could open gates for 85,600, and eventually 86,200.

Support: Short-term moving averages remain strong cushions for dips.

Where to Focus: Sector & Stock Picks
Shah recommends staying overweight on banking, defence, infrastructure and financials.
“We feel one should continue to focus on quality Midcap Banks as well as PSU Banks as there is a possibility of continuation of outperformance in that space compared to Private Banks,” he said.

Within private banks, Axis Bank stands out. “Axis Bank is technically well placed to outperform in the coming days,” he said.

Stocks Likely to Outperform
According to Shah, the following counters look strong technically in the short term:
AXISBANK

CUB

CDSL

SCI

GRSE

BANKBARODA

BELRISE

BEL

Sectors Expected to Outperform
Nifty Private Bank

PSU Banks

Financial Services

Defence

Automobiles

Oil & Gas

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Capital Market

Infrastructure

Pharma

Sectors Likely to Underperform
Nifty FMCG

India Tourism

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